Malaysia: Economic growth slows substantially at the outset of this year
May 15, 2013
In the first quarter, GDP expanded 4.1% over the same period last year. The figure was well below the revised 6.5% rise tallied in the fourth quarter (previously reported: +6.4% year-on-year) and represented the slowest pace of expansion observed since Q3 2009. In addition, the print undershot market expectations that had the economy growing 5.5%.
The deceleration mainly reflected a poorer performance of the external sector, whereas domestic demand remained robust. Private consumption expanded 7.5% (Q4 2012: +6.2% yoy), whereas government spending added a meagre 0.1% (Q4: +1.2% yoy). In addition, gross fixed capital formation decelerated from a 16.0% increase in the fourth quarter to a 13.2% expansion in the first.
Meanwhile, exports of goods and services fell for the third consecutive quarter and declined 0.6% (Q4: -1.6% yoy). Imports, on the other hand, expanded 3.6% in Q1, which contrasted the 0.6% decline recorded in Q4. Consequently, the external sector's net contribution to overall growth deteriorated from minus 1.1 percentage points in the fourth quarter to minus 3.7 percentage points in the first.
The government expects economic growth to range between 4.5% and 5.5% this year. FocusEconomics Consensus Forecast panellists expect GDP to grow 5.2% in 2013, which is up 0.1 percentage points from the previous month's projection. For 2014, the panel anticipates economic growth at 5.3%.