The Malaysian economy advanced 4.7 percent year-on-year in the fourth quarter of 2018, following a 4.4 percent expansion in the previous three-month period and matching market expectations. It was the strongest growth rate since the first quarter of the year, as net external demand contributed positively to GDP growth, while private consumption, government spending, and investment slowed. For 2018 as a whole, the economy grew 4.7 percent, compared to a 5.9 percent expansion in 2017.
In the fourth quarter, exports increased by 1.3 percent, rebounding from a 0.8 percent fall in the September quarter and imports edged up 0.2 percent, accelerating from a 0.1 percent rise in the previous three months.
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Private expenditure went up by 8.5 percent, easing from a 9.0 percent advance in the previous period, driven by consumption of food & beverages, communication, and transport and restaurants & hotels. Also, gross fixed capital formation rose 0.3 percent, slower than a 3.2 percent gain in the preceding quarter, mainly due to a decline in machinery & equipment investment; and government spending rose 4.0 percent, softer than a 5.2 percent increase in the prior three months.
On the production side, growth slowed for services (6.9 percent vs 7.2 percent in Q3); manufacturing (4.7 percent vs 5.0 percent) and construction (2.6 percent vs 4.6 percent). On the other hand, agricultural activity shrank less (-0.4 percent vs -1.4 percent) and mining & quarrying output rebounded (0.5 percent vs -4.6 percent).
For 2018 as a whole, the economy grew 4.7 percent, compared to a 5.9 percent expansion in 2017.
On a quarter-on-quarter seasonally-adjusted basis, the GDP advanced by 1.4 percent in the fourth quarter, following a 1.6 percent expansion in the previous quarter.
Moving forward, economic growth is estimated to remain on a steady growth path in 2019, driven mainly by domestic demand amid continuing fiscal rationalization while external sector is likely to soften with moderating global demand.
Headline inflation is expected to average moderately higher. The impact of consumption tax policy on headline inflation in 2019 will start to lapse towards the end of the year.