KUALA LUMPUR (July 19): Malaysia’s economic growth accelerated faster than expected in the second quarter (2Q2024) from a year earlier, driven by consumer spending and exports, according to the official advance estimate released on Friday.

Gross domestic product (GDP) is estimated to have grown 5.8% in April to June, when compared to the same period last year, the Department of Statistics Malaysia said in a statement. That compares to the median 4.7% expansion predicted in a Bloomberg survey. In the first quarter, the economy grew 4.2% year-on-year (y-o-y).

The pace of growth was also the fastest since 4Q2022. For the first half of the year (1H2024), GDP increased by 5.0%, compared to a 4.1% growth in 1H2023.

The comprehensive data for the latest quarter will be released on Aug 16.

“Malaysia's economy is expected to continue its growth momentum, supported by domestic and export-driven factors, with a positive outlook for the remainder of the year,” the department said.

The increase in household consumption was spurred by the festive and school holidays as well as the Sumbangan Tunai Rahmah payment in April, it said. Further, a total of RM6.98 billion was withdrawn from the Employees Provident Fund’s Account 3 by June to support short-term financial needs.

The growth estimate for 2Q2024 is in line with the latest indicators, such as the industrial production index and higher wholesale and retail sales, said chief statistician Datuk Seri Dr Mohd Uzir Mahidin.

External trade also grew, and “other factors include an increase in tourist arrivals as well as oil palm production, and progress in the development of megaprojects”, he noted.

On the supply side, the services sector — which accounts for more than half of Malaysia’s economic output — expanded 5.6% in 2Q2024, thanks to wholesale and retail trade, as well as the transportation-and-storage, and finance-and-insurance sub-sectors.

Manufacturing activities, meanwhile, rose 7.1%, supported by growth in all sub-sectors, mainly non-metallic mineral products, basic metal and fabricated metal products, as well as petroleum chemical, rubber and plastic products.

Construction expanded 17.2%, led by civil engineering and specialised construction activities, while the agriculture sector grew 7.1%, on the back of a growing palm oil sub-sector.

Mining and quarrying activities rose 3.3%, moderating from a 5.7% y-o-y growth in the previous quarter, due to lower output in the natural gas sub-sector.