KUALA LUMPUR: Malaysia's economy expanded at a slower pace of 5.4% in the first quarter of 2018 underpinned by continued expansion in private sector activity and strong support from net exports.
Bank Negara Malaysia said on Thursday that from the supply side, all economic sectors expanded. However, the growth was slower than a Bloomberg survey of a 5.6% expansion.
“On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1.4% (Q4, 2017: 1.0%),” it said. In the fourth quarter of 2017, GDP expanded at 5.9% and in Q1 of 2017, it expanded at 5.6%.
In terms of economic activity, Bank Negara said in Q1 of 2018, the services sector grew at 6.5% (versus 6.2% for the whole of 2017), manufacturing 5.3% (6%), mining 0.1% (1%), agriculture 2.8% (7.2%) and construction 5.4% (6.7%).
Bank Negara said headline inflation declined to 1.8% in the Q1 of 2018 from 3.5% in Q4 of last year.
The decline reflected the smaller contribution of domestic fuel prices due to the smaller increase in global oil prices compared to the previous quarter and a stronger ringgit exchange rate in Q1 of 2018.
On the outlook, Bank Negara said growth was expected to remain favourable in 2018, with domestic demand continuing to be the key driver of growth.
“Growth prospects are further supported by continued positive spillovers from the external sector to domestic economic activity.
“Headline inflation is projected to average 2% - 3% in 2018, due to a smaller contribution from global cost factors and a stronger ringgit exchange rate compared to 2017.
“Underlying inflation, as measured by core inflation, is also expected to remain small, due to smaller cost pass-through to retail prices compared to 2017,” it said.
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