Malaysia: Economic growth edges up in Q2
August 21, 2013
In the second quarter, GDP expanded 4.3% over the same period last year. The figure was just above the 4.1% rise tallied in the first quarter, but fell short of market expectations of 4.7% growth in the economy.
The acceleration was driven by an 11.2% surge in government spending (Q1: +0.1% year-on-year). In contrast, private consumption slowed from 7.5% in the first quarter to 7.2% in the second. Moreover, gross fixed capital formation decelerated significantly, from a 13.1% increase in the first quarter to a 6.0% expansion in the second.
In the external sector, exports of goods and services contracted 5.2% (Q1: -0.6% yoy), reaching the lowest point in 15 quarters. Imports also fell, contracting 2.0% in Q2, which contrasted the 3.6% rise recorded in Q1. Consequently, the external sector's net contribution to overall growth increased from minus 3.7 percentage points in the first quarter to minus 3.3 percentage points in the second.
The government expects economic growth to range between 4.5% and 5.0% this year. FocusEconomics Consensus Forecast panellists expect GDP to grow 4.8% in 2013, which is unchanged from last month's projection. For 2014, the panel expects economic growth of 5.2%.
Author: Carl Kelly, Economist