KUALA LUMPUR, Nov 15 — The Malaysian economy grew 4.4 per cent in the third quarter of 2019 (Q3 2019), moderately lower compared with the 4.9 per cent growth recorded in Q2 2019, says Bank Negara Malaysia (BNM).
GDP growth was recorded at 4.4 per cent during the same quarter last year.
BNM Governor Datuk Nor Shamsiah Mohd Yunus attributed the lower gross domestic product (GDP) performance to the lower growth in key sectors such as services, manufacturing and agriculture as well as a decline in mining and construction activities.
“On the demand side, most domestic demand components and net exports also registered slower growth momentum,” she told a media briefing on Malaysia’s third-quarter GDP performance, here today.
On key sectors, Nor Shamsiah said the services sector grew by 5.9 per cent in Q3 2019 compared with 6.1 per cent in Q2 2019, while growth in the manufacturing sector moderated to 3.6 per cent (Q2 2019: 4.3 per cent) and the agriculture sector grew by 3.7 per cent (Q2 2019: 4.2 per cent).
The lower growth in the manufacturing sector was due to slower growth in electrical and electronics (E&E) which was affected by weaker global demand.
The sector was also affected by the slower growth in consumer-related industries, following the lower growth in crude and refined palm oil production.
The agriculture sector, on the other hand, was impacted by the slow pace of recovery in oil palm output while forestry and logging activities contracted further.
Meanwhile, the mining sector contracted by 4.3 per cent (Q2 2019: +2.9 per cent), mainly due to maintenance works that affected oil production.
The construction sector also contracted by 1.5 per cent (Q2 2019: +0.5 per cent) due to the larger contraction in the non-residential subsector amid continued oversupply of commercial properties.
During the quarter under review, Nor Shamsiah said domestic demand growth moderated to 3.5 per cent from 4.6 per cent in Q2 2019, and private sector expenditure remained as the key contributor to growth.
Private consumption grew by 7.0 per cent in Q3 2019 as household spending normalised towards its long-term trend, partly reflecting strong base effects from the tax holiday spending last year, while public consumption spending increased by one per cent compared with 0.3 per cent in Q2 2019.
Private investment growth expanded marginally by 0.3 per cent compared with 1.8 per cent in Q2 2019, weighed down by lower capital spending across major economic sectors, while public investment remained in contraction (-14.1 per cent; Q2 2019: -9.0 per cent), reflecting lower capital spending by both federal government and public corporations.
Nor Shamsiah said the Malaysian economy continued to expand in Q3 2019, bringing the overall performance of the first three quarters to 4.6 per cent.
Meanwhile, unemployment rate was stable at 3.3 per cent in the quarter under review.
Moving forward, the pace of growth is expected to be sustained for the remainder of the year and going into 2020, she said.
She added that household spending would remain as the key driver for growth, supported by continued employment and income growth.
“On the external front, support from net exports will likely moderate, as imports are expected to grow faster than exports in line with the projected improvement in investment activities,” said Nor Shamsiah.
Headline inflation, which stood at 1.3 per cent in Q3 2019, is projected to be low for 2019 as a whole, reflecting the downward contribution from the lapse in the impact from the Sales and Services Tax and domestic fuel prices, as fuel price ceilings remained in place until the end of 2019.
However, moving into 2020, headline inflation is projected to average higher but will remain modest, reflecting the lapse in the impact of consumption tax policy changes, the lifting of the fuel price ceilings amid the relatively subdued outlook on global oil prices, and policy measures in place to contain food prices.