Malaysia: GDP growth slows to lowest rate in almost two years
August 13, 2015
In the second quarter of 2015, GDP expanded 4.9% over the same period of the previous year. The figure marked a deceleration compared to the 5.6% growth tallied in Q1, but overshot the 4.4% rise that the markets had expected. The figure represented the slowest rate of expansion in seven quarters. The Department of Statistics indicated that the result was driven by solid but weaker growth in domestic demand compared to the previous quarter, which more than offset the external sector’s negative contribution. In quarterly terms, seasonally adjusted GDP increased 1.1%, decelerating from Q1’s 1.2%.
On the domestic front, private consumption grew 6.4% in Q2, which was down from last quarter’s 8.9% expansion (previously reported: +8.8% year-over-year), and marked the lowest reading in four years. The growth in private consumption was driven by spending on food and beverages, transportation and communication. Gross fixed investment growth saw a sharp fall in Q2, slowing from a 7.9% expansion in Q1 to a meagre 0.5% increase in Q2, marking a record low for the series. The fall was due in part to a contraction in spending on machinery and new equipment.
In the external sector, exports of goods and services declined 3.7% in Q2, which was a deceleration compared to the 0.6% contraction in Q1 and marked the sharpest deterioration in two years. Imports fell 2.8% in Q2, which contrasted the 1.0% increase recorded in the previous quarter. Consequently, the external sector’s net contribution to overall growth improved slightly from Q1’s minus 1.1% to minus 1.0% in Q2.
Author: Robert Hill, Economist