Malaysia's economy expanded at the fastest pace in more than three years in the third quarter on private spending and foreign demand.
Gross domestic product rose 6.2 percent year-on-year, faster than the 5.8 percent increase seen in the second quarter, data from the Department of Statistics showed Friday.
This was the fastest pace since mid-2014. The growth rate was forecast to slow slightly to 5.7 percent.
On a sequential basis, GDP advanced 1.8 percent versus 1.3 percent in the preceding quarter.
In the quarterly bulletin, the Bank Negara Malaysia said the economy is poised to register a strong growth that is close to the upper end of the official forecast range of 5.2 percent- 5.7 percent in 2017.
In the budget speech last month, Prime Minister Najib Razak had forecast 5-5.5 percent economic growth for next year on strong domestic demand.
Alex Holmes and Krystal Tan, economists at Capital Economics, said although growth seems to have peaked, the economy should continue to grow at a decent pace over the next year, supported by robust exports and investment.
The expenditure-side breakdown of GDP showed that private consumption advanced 7.2 percent in the third quarter on higher spending on food and non-alcoholic beverages and communication.
Gross fixed capital formation growth accelerated to 6.7 percent from 4.1 percent. The strong growth was driven by machinery and equipment.
Exports advanced 11.8 percent following 9.6 percent increase seen in the previous quarter. At the same time, imports increased 13.4 percent annually.
On the production side, the service sector expanded 6.6 percent following 6.3 percent a quarter ago, the statistical office said today. Likewise, manufacturing sector growth improved to 7 percent from 6 percent.
Meanwhile, agriculture sector rose at a slower pace of 4.1 percent after registering a growth of 5.9 percent in the previous quarter.
In a separate communique, the statistical office said the balance of payments showed a larger surplus of MYR 12.5 billion compared to MYR 9.6 billion a quarter ago.
The current account balance posted a surplus of MYR 2.9 billion due to further expansion in goods accounts of MYR 31.7 billion. Meanwhile, services account also contributed by registering lower deficit of MYR 4.9 billion.
The central bank today said headline inflation moderated to 3.8 percent in the third quarter due to lower average domestic fuel prices.
Going forward, the central bank said the ringgit will continue to be driven by a confluence of external and domestic factors. These include the timing and pace of monetary policy normalization by major central banks, global geopolitical developments, and the domestic economic performance.
by RTT Staff Writer
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