The Malaysian economy grew 4.5 percent year-on-year in the second quarter of 2018, following a 5.4 percent expansion in the previous three-month period and missing market consensus of 5.2 percent. It was the weakest growth rate since the fourth quarter of 2016, as net external demand contributed negatively to GDP growth, while private consumption, investment, and government spending continued to increase at a solid pace.
In the second quarter, exports went up by 2.0 percent, slower than a 3.7 percent rise in the March quarter. Imports rose at a faster 2.1 percent, recovering from a 2 percent fall in the previous three months.
Private expenditure increased by 8.0 percent, following a 6.9 percent rise in the previous period, driven by higher consumption of food & beverages, communication, and restaurants & hotels. Also, gross fixed capital formation expanded 2.2 percent, much faster than a 0.1 percent growth in the preceding quarter, due to a rebound in machinery & equipment; and government spending went up 3.1 percent, faster than a 0.4 percent increase in the prior three months.
On the production side, growth slowed for both manufacturing (4.9 percent vs 5.3 percent in Q1) and construction (4.7 percent vs 4.9 percent). In addition, the agriculture sector contracted (-2.5 percent vs 2.8 percent in Q1), as well as the mining & quarrying sector (-2.2 percente vs 0.1 percent). On the positive note, services output expanded by 6.5 percent, the same pace as in the first quarter.
On a quarter-on-quarter seasonally-adjusted basis, the GDP rose by 0.3 percent in the second quarter, the smallest increase since the first quarter of 2013.
Considering the first half of the year, the economy expanded by 4.9 percent year-on-year, compared to a 5.7 percent expansion in the same period of 2017.
Moving forward, economic growth is expected to remain on a steady growth path in 2018, boosted mainly by domestic demand. Meanwhile, labour market conditions and capacity expansion will continue to support robust private consumption and investment respectively. Headline inflation is expected to moderate, and the extent of the moderation would depend on the pass-through from changes in the consumption tax policy.
8/17/2018 8:37:35 AM