Malaysia: Economic growth accelerates to highest level in over a year in Q1
May 16, 2014
In the first quarter, GDP expanded 6.2% over the same period of last year. The figure marked an acceleration over the 5.1% rise tallied in the fourth quarter and beat market expectations of 5.8% growth in the economy. The result, which marked the fastest pace of growth in five quarters, was driven by higher government spending and stronger exports growth.
On the domestic front, private consumption grew a significant 7.1% in Q1, although growth was slower than in the previous quarter (Q4: +7.4% year-on-year). Public spending jumped from a 5.2% increase in Q4 to an 11.2% expansion in Q1. Gross fixed capital formation moderated from a 6.5% rise in Q4 to a 6.3% increase in Q1.
In the external sector, exports of goods and services reached 7.9% growth in Q1, marking an acceleration over the 5.7% increase in Q4. Imports grew 7.1% in Q1, matching the result from Q4. Consequently, the external sector's net contribution to overall growth swung from minus 0.6 percentage points in Q4 to plus 1.3 percentage points in Q1.
The government expects economic growth to range between 5.0% and 5.5% in 2014. FocusEconomics Consensus Forecast panelists expect GDP to grow 5.1% in 2014, which is down 0.1 percentage points from last month's projection. For 2015, the panel expects economic growth of 5.0%.
Author: Carl Kelly, Economist