Malaysia: GDP growth records fastest upturn in a year in Q2
August 12, 2022
GDP growth picked up to 8.9% year on year in the second quarter, from 5.0% in the first quarter. Q2's reading marked the strongest growth since Q2 2021, as the economy benefited from the lifting of all remaining Covid-19 restrictions and the subsequent pickup in international tourism.
The upturn reflected improvements in private consumption, fixed investment and exports. Private consumption growth accelerated to 18.3% year on year in Q2 compared to a 5.5% expansion in Q1. Meanwhile, fixed investment growth improved to 5.8% in Q2, from the 0.1% increase logged in the prior quarter. Conversely, public consumption growth moderated to 2.6% in Q2 (Q1: +6.7% yoy).
On the external front, exports of goods and services increased 10.4% on an annual basis in the second quarter, which was above the first quarter's 8.0% expansion. In addition, imports of goods and services growth sped up to 14.0% in Q2 (Q1: +11.1% yoy).
On a seasonally-adjusted quarter-on-quarter basis, economic growth ebbed 3.5% in Q2, from the previous quarter's 3.8% growth.
Regarding the outlook, analysts at the EIU project GDP growth will accelerate amid a more favorable base effect and despite rising price pressures:
“We believe that private consumption (and, by extension, real GDP growth) will strengthen in July-September. The rates of expansion will be flattered by very weak performance in the third quarter of 2021, when the country grappled with a surge in coronavirus infections. In view of the latest data, we will be revising up our forecast for real GDP growth in 2022 to around 6%, from 5% at present.”
Author: Jonuel Pérez, Junior Economist