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Malaysia GDP Q3 2023

Malaysia: GDP growth improves in Q3

GDP growth sped up to 3.3% year on year in the third quarter, from 2.9% in the second quarter. On a seasonally adjusted quarter-on-quarter basis, economic growth accelerated to 2.6% in Q3, following the previous period’s 1.5% increase. Q3’s reading marked the strongest growth since Q2 2022.

The improvement was spearheaded by higher household spending growth, which came in at 4.6% year-on-year in Q3 compared to Q2’s 4.3% expansion. Public spending also sped up to a 5.8% expansion in Q3 (Q2: +3.8% yoy). Meanwhile, fixed investment growth softened to 5.1% in Q3, from 5.5% logged in the previous quarter. On the external front, exports of goods and services declined at a steeper pace of 12.0% in Q3 (Q2: -9.4% yoy). In addition, imports of goods and services fell at a more pronounced rate of 11.1% in Q3 (Q2: -9.7% yoy), marking the worst reading since Q2 2020.

Analysts at Nomura commented on the outlook:

“In H1 2024, growth momentum should pick up, led by a recovery in electronics exports before facing headwinds by H2, given our house view of a US recession and a still-muted recovery in China. We expect domestic demand, particularly private consumption spending, to follow a broadly similar trajectory, given the large and quick spillover effects from export growth via the labor market and wage growth, with about a one-quarter lag. Business sentiment and private investment spending should likewise remain relatively subdued, given still-elevated global uncertainty.”

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