Economy expands at 4.4% in Q3, slower on-year
KUALA LUMPUR: Malaysia’s economy expanded at 4.4% in the the third quarter ended Sept 30, which slower than the 6.2% a year ago. It was also below economists’ expectation of 4.6% growth.
Bank Negara Malaysia data showed on Friday the services sector expanded by 7.2%, manufacturing by 5% and construction up by 4.6%. However, mining fell by 4.6% and agriculture contracted by 1.4%.
“Private sector activity continued to be the primary driver of growth, as private consumption expanded strongly following the zerorisation of Goods and Services Tax (GST) in Q3,” it said.
On the supply side, the services and manufacturing sectors supported growth, while the mining sector continued to be affected by production shocks.
The agriculture sector remained weak due to the protracted recovery from production constraints in the previous quarter.
“On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1.6%, faster than the 0.3% growth in the previous quarter,” it said.
For the first three quarters of 2018, Malaysia’s GDP registered a growth of 4.7% with a value of RM907.2bil at constant prices and RM1,055.2bil at current prices.
Bank Negara said going forward, the Malaysian economy is expected to remain on a steady growth path.
“Private sector activity will remain the key driver of growth amid the reprioritisation of public sector expenditure. For the remainder of the year and going into 2019, a gradual recovery in commodity production will also provide support to growth,” it said.
The Statistics Department said the services sector, which expanded 7.2% in the third quarter, remained as the largest contributor to the economy.
“The expansion of this sector was fuelled by the strong momentum in wholesale & retail trade and information & communication. Wholesale & retail trade registered a higher growth of 9.5% reflecting the outstanding performance in retail and motor vehicle,” it said.
Information & communication grew by 8.4% contributed by communication and computer services activities.
Finance & insurance rose to 6.3% from 4.9 % following a better growth performance in Finance and continued double digit growth in Insurance, the department said.
On the outlook for inflation, Bank Negara said the annual average headline inflation was expected to be low in 2018, mainly reflecting the impact from the GST zerorisation and the stable domestic fuel prices.
“Going forward, headline inflation is expected to increase primarily due to higher projected global oil prices and the prospective floating of fuel prices. While the impact of the consumption tax policy will contribute to higher headline inflation in 2019, it will lapse towards the end of 2019,” it said.
Source: The Star