KUALA LUMPUR: Malaysia’s economy grew faster than initially estimated in the first quarter, driven by private spending and a rebound in exports.
Gross domestic product (GDP) expanded 4.2% in the January-March period, according to Bank Negara and the Statistics Department in a joint briefing recently.
That’s higher than the 3.9% advance estimate as well as the median forecast in a Bloomberg survey. On a sequential basis, the economy grew 1.4% from the previous three months.
While strong services sector and manufacturing output helped drive the economy, a better than previously expected out-turn in farm and construction segments contributed to lifting overall growth.
Agriculture output grew 1.6% in the quarter, up from 1.3% seen previously. Construction output expanded 11.9% versus 9.8% seen initially.
Forward-looking indicators point to continued growth for the Malaysian economy, Bank Negara governor Datuk Rasheed Abdul Ghaffour said at a briefing in Kuala Lumpur.
He expects consumer spending to improve, aided by higher income levels, sound balance sheets and support from the government.
Malaysia’s economic outlook for 2024 looks brighter after tepid global demand caused growth to moderate last year. A sustained recovery in China – its largest trading partner – could help Malaysia’s manufacturing sector and boost tourist arrivals as well as investment.
Bank Negara expects GDP to expand between 4% and 5% this year on improving external demand.
The risk of slowing domestic spending, a key growth driver, also looks to be fading.
The central bank anticipates that inflation, which had been below 2% since September, may average as much as 3.5% this year should subsidies be phased out.
The inflation forecast is based on the assumption that the government will unwind the fuel subsidies in a “gradual and sequential” manner, Abdul Rasheed said. — Bloomberg
