Malaysia: Economy grew 4.9% in Q2, 2015

Malaysia’s economic growth slowed to 4.9% in the Q2 of 2015, compared with 5.6% in the preceding quarter, as exports decelerated.

The growth rate, nevertheless, was slightly higher than market expectation of a 4.8% expansion for Malaysia’s gross domestic product (GDP) in the three months to June.

 BNM governor Tan Sri Dr Zeti Akhtar Aziz said on Thursday the economy was projected to remain resilient and on a steady growth path.

Zeti, who will remain as governor until her term ends next year, said headline inflation was higher in the second quarter, growing at 2.2%.

“Inflation is expected to be higher before moderating towards second half of 2016,” she said.

During the quarter in review, the services sector expanded 5%, supported by growth in the wholesale & retail trade and information & communication sub-sectors, while the manufacturing sector grew at a moderate pace of 4.2%, supported by electrical, electronic & optical products.

Growth of the mining & quarrying sector, which accounted for 9.1% of Malaysia’s economy, moderated to 6%, compared with 9.6% in the preceding quarter due to the decline in production of natural gas and slower production of crude oil.

Bank Negara data showed that private consumption expanded 6.4% in the second quarter of the year, compared with 8.8% in the first quarter, supported by growth in the consumption on food & beverages, housing & utilities, communication and transportation.

Gross fixed capital formation eased to 0.5%, from 7.9% in the preceding quarter due to the deceleration in machinery & equipment sector.

The central bank said the momentum of gross fixed capital formation was led by private-sector investment, grew 3.9%.

In the three months to June 2015, Malaysia’s exports contracted 3.7%, reflecting the subdued performance in the shipment of goods and services. Imports, on the other hand, fell 2.8% due to a contraction in the country’s demand for foreign goods.

Bank Negara Malaysia (BNM) said growth in the second quarter was supported by continued expansion in services and a turnaround in agricultural production.

/theSTAR 13-08-15

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