Malaysia’s economy recorded a 4.5% growth in the last quarter of 2016, underpinned by continued expansion in private sector expenditure, leading to a full-year growth of 4.2%.
The 2016 Gross Domestic Product (GDP) is, however, lower than the 5 % and 6% registered in 2015 and 2014 respectively.
On the supply side, growth continued to be driven by the manufacturing and services sectors, Bank Negara Malaysia (BNM) announced today.
On a quarter-on-quarter seasonally adjusted basis, the economy recorded a sustained growth of 1.4% (3Q 2016:1.4%), it said.
“While the external environment may continue to remain challenging, the Malaysian economy will experience sustained growth with the primary driver being domestic demand,” Bernama reported as the Central Bank said in a statement.
The central bank said private consumption is anticipated to remain supported by wage and employment growth, with the additional impetus coming from announced government measures to support the disposable income of households.
“Investment activity will continue to be anchored by the on-going implementation of infrastructure projects and capital spending in the manufacturing and services sectors,” it added.
Explaining further the fourth quarter GDP growth, BNM said overall, domestic demand expanded at a more moderate pace, as the improvement in private consumption and investment activity was more than offset by the decline in public expenditure.
In the fourth quarter 2016, private consumption grew by 6.2% versus 6.4% in the third quarter, supported by continued wage and employment growth.
Private investment registered growth of 4.9% (3Q 2016: 4.7%), following continued capital spending in the services and manufacturing sectors.
The growth of public investment improved mainly on account of higher spending on fixed assets by the public corporation, but nevertheless, remained in contraction during the quarter.
Public consumption also declined by 4.2% (3Q 2016: + 2.2%) arising from the rationalisation of spending on supplies and services and a moderation in the growth of spending on emoluments.
On the external front, net exports contributed positively to growth as real exports expanded at a faster rate than real imports.
As for the supply side, growth in the manufacturing, mining and agriculture sectors improved.