Malaysia GDP Growth Strongest In 2 Years In Q1


Malaysian economy expanded 5.6 percent year-on-year in the first quarter of 2017, compared to a 4.5 percent growth in the previous three months and above market expectations of 4.8 percent. It was the strongest expansion since the March quarter 2015, as private consumption, investment and exports rose at faster paces and government spending rebounded.

In the March quarter, private consumption grew by 6.6 percent year-on-year, faster than a 6.2 percent rise in the previous quarter. Gross fixed capital formation gained 10 percent, compared to a 2.4 percent expansion in the preceding quarter. Exports rose 9.8 percent from  a 1.3 percent rise in the December quarter. Imports also went up 12.9 percent, compared to a 1.6 percent rise in the previous three months. Goverment spending rose 7.5 percent, rebounding from a 4.2 percent decline in the prior three months.

On the production side, the agriculture sector rebounded (8.3 percent), after contracting 2.5 percent in the December quarter, due to a double-digit growth in palm oil (17.7 percent from -7.2 percent in Q4). Construction sector grew by 6.5 percent (from 5.1 percent in Q4). Also, services sector went up at a faster 5.8 percent from 5.5 percent in the preceding three months, supported primarily by consumption and business related services; manufacturing (5.6 percent from 4.7 percent)  while mining sector increased at a slower pace (1.6 percent from 4.9 percent).

Moving forward, the Malaysian economy is expected to be supported by domestic demand. The economy is on track to register higher growth in 2017, compared to a 4.2 percent expansion in 2016. Exports are expected to benefit from the improvement in global growth. Regarding inflation, it is expected to moderate from the second quarter after increasing in the first quarter.

On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1.8 percent, faster than a downwardly revised 1.3 percent growth in the previous period. It was the fastest quarterly expansion since the third quarter 2013. 

Department Statistics of Malaysia | Chusnul Ch Manan | chusnul@tradingeconomics.com
5/19/2017 9:09:14 AM