KUALA LUMPUR: Malaysia's economy grew at 3.6% in the fourth quarter of 2019 (4Q 2019) due to the weaker manufacturing and agriculture sectors and it was the slowest since the third quarter of 2009.
According to the Statistics Department for 2019, Gross Domestic Product (GDP) expanded by 4.3% which was slower than the 4.7% in 2018. The growth in 2019was the weakest since 2009.
A Bloomberg poll of 21 economists showed a median growth forecast of 4.1% for the October to December 2019 period, with individual forecasts ranging between 3.4% and 4.3%.
On the production side, the performance was anchored by services, manufacturing and construction. However, the mining & quarrying and agriculture sectors recorded a decline.
The services sector in 4Q 2019 expanded by 6.1% from 5.9% a year ago, manufacturing expanded at a slower pace of 3% from 3.6% while construction expanded by 1% from a contraction of 1.5%.
Mining and quarrying declined at a slower pace of 2.5% compared with 4.3% but agriculture clumped by 5.7%, a stark contract from the growth of 3.7%.
On the expenditure side, the expansion in private final consumption expenditure was supported by the higher consumption on food & non-alcoholic beverages, restaurants & hotels and transport. Meanwhile, gross fixed capital formation registered an improved negative.
The Chief Statistician of Malaysia, Datuk Seri Dr Mohd Uzir Mahidin added that, Malaysia experienced a moderation in economic performance for this quarter.
Overall year 2019, Malaysia’s economy registered a growth of 4.3 per cent (2018: 4.7%) with a value of RM1.42 trillion at constant prices and RM1.51 trillion at current prices.
He said the services sector continued as the main impetus to the economic growth which increased 6.1% (Q3 2019: 5.9%). The performance of Services sector was supported by wholesale & retail trade, information & communication and food & beverages and accommodation sub-sectors.
The manufacturing sector moderated to 3% as against 3.6% in the previous quarter of 2019.
However, the recovery in the construction sector which grew marginally 1.0 per cent had also supported the growth in the fourth quarter of 2019.
He said the decline in agriculture sector performance was mainly due to the decreased in oil palm, -16.9% (Q3 2019: 8.4%) and forestry & logging, -14.1% (Q3 2019: -12.3%).
On the expenditure side, private final consumption expenditure surged 8.1% (Q3 2019: 7.0%) in the fourth quarter of 2019.
Gross fixed capital formation posted a smaller negative 0.7% (Q3 2019: -3.7%) due to the recovery in structure and improved performance in Machinery & equipment.
Malaysia’s current account surplus narrowed to RM7.6 billion from RM11.5 billion in the previous quarter.
This was due to larger deficit in Services Account which mainly caused by a slower performance in travel activities and widening deficit in Primary Income as a result of higher dividend earned by foreign companies. Nevertheless, Goods Account continued to record a higher surplus.
In 2019, the current account surplus hit the highest value of RM49.7bil since 2012 (RM50.2bil) despite turning downward in the second half of the year.
The favourable performance was contributed by higher surplus in goods account at RM125.5bil and smaller deficit in services account at RM10.9bil.
“Financial account in this quarter recorded a lower net outflow of RM600mil against RM1.3bil in last quarter, primarily due to lower outflow in portfolio investment, ” said Mohd Uzir Mahidin said.
Foreign direct investment (FDI) expanded to RM3.7bil from RM2.9bil in the previous quarter.
The FDI was mainly from Singapore, Ireland and Hong Kong.
On the other hand, direct investment abroad (DIA) reduced to RM1.5bil from RM3.7bil in preceding quarter. The main destinations of DIA was Brazil, Singapore and the US.