BNM: GDP growth at 4.4pc, on track for 4.8pc in 2018
Published on: Saturday, November 17, 2018
Kuala Lumpur: The Malaysian economy grew by 4.4 per cent in the third quarter of 2018 (3Q18) driven by strong private consumption following the zerorisation of the Goods and Services Tax (GST) during the quarter.The economy rose by 4.7 per cent in the first three quarters and is on track to register a 4.8 per cent growth in 2018, said Bank Negara Malaysia (BNM) Governor Datuk Nor Shamsiah Mohd Yunus (pic).Despite global headwinds, she said, the Malaysian economy recorded a firm growth in 3Q18, mainly driven by robust household spending which grew by 9.0 per cent especially in July and August, strong employment and wage growth as well as positive consumer sentiment.
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She added the growth was also supported by higher private investment, which increased by 6.9 per cent, and the lingering effect of one-off supply shocks. "The lingering commodities-specific supply shocks had led to a contraction in commodity production (and exports)," said Nor Shamsiah when announcing the third quarter gross domestic product here on Friday. "Growth in the second and third quarters this year could have been higher by 50 to 70 basis points had it not been for the supply shock in mining and agriculture," she added. On a quarter-on-quarter seasonally-adjusted basis, the economy grew 1.6 per cent faster than the 0.3 per cent in the previous quarter.
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Gross exports moderated to 5.2 per cent on account of slower expansion in non- electrical and electrical manufactured exports amid a smaller contraction in commodity exports. On the supply side, the services and manufacturing sectors supported growth, while the mining sector continued to be affected by supply shocks.
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The agriculture sector remained weak due to the protracted recovery from production constraints in the previous quarter. In the quarter, current account registered a surplus of RM3.8 billion.In the first three quarters of 2017, Malaysia's current account registered a cumulative surplus of RM22.7 billion or 2.2 per cent of gross national income (GNI). "Moving forward, the current account is expected to be in surplus supported by a sizeable goods surplus which would offset the deficit in the services and income account," said Nor Shamsiah, adding that for 2018, the current account balance would be between two to three per cent of GNI. Headline inflation declined to 0.5 per cent in the third quarter of 2018 compared to 1.3 per cent in the second quarter of 2018, mainly due to the impact of the zerorisation of GST. The implementation of the Sales and Services Tax beginning Sept 1, 2018 had a muted impact on inflation during the quarter.The ringgit fell 2.5 per cent against the US dollar in the third quarter, driven mainly by continued strengthening of the greenback and moderate outflows of non-resident portfolio investment. "The strengthening of the US dollar was supported by positive US economic data and outlook during the quarter. The ringgit and the regional currencies were also affected by negative sentiments due to contagion risk from vulnerable emerging market economies," said Nor Shamsiah. Stay up-to-date by following Daily Express’s Telegram channel.
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