Malaysia: Economic growth accelerates in Q3
November 15, 2013
In the third quarter, GDP expanded 5.0% over the same period last year. The figure came in above the 4.4% rise tallied in the second quarter and beat market expectations of 4.7% growth in the economy.
On the domestic front, growth in private consumption jumped from 7.2% in Q2 to 8.2% in Q3. Government spending was strong at 7.8% growth, although it was slower than in the previous quarter (Q2: 11.9% year-on-year). Moreover, gross fixed capital formation accelerated from a 6.0% rise in Q2 to an 8.6% expansion in Q3.
The Q3 acceleration was also driven by an improvement in the external sector. Exports of goods and services reached the highest level in six quarters at 1.7% growth in Q3, after having recorded a 5.2% contraction in Q2. Imports also rebounded, growing 1.8% in Q3, which contrasted the 2.0% drop recorded in Q2. Consequently, the external sector's net contribution to overall growth increased from minus 3.3 percentage points in Q2 to a reading of zero in Q3.
The government expects economic growth to range between 4.5% and 5.0% this year, and between 5.0% and 5.5% in 2014. FocusEconomics Consensus Forecast panelists expect GDP to grow 4.5% in 2013, which is unchanged from last month's projection. For 2014, the panel expects economic growth of 5.1%, which is also unchanged from last month's forecast.
Author: Carl Kelly, Economist