KUALA LUMPUR (Aug 12): Malaysia’s economy in the second quarter may have expanded slightly slower than the pace indicated by the official flash estimate, economists said.

Gross domestic product likely grew 4.3% year-on-year (y-o-y) in the April-June quarter and below the official advance estimate as latest supply- and demand-side indicators offered a mixed picture, according to Maybank Investment Bank (Maybank IB) and BIMB Securities.

Slower retail sales and exports growth point to softer household spending and weaker external demand while robust capital goods imports suggest a surge in acquisition of fixed assets, Maybank IB said.

Malaysia’s economy expanded at 4.5% in the second quarter from a year earlier as resilient consumer demand offset weaker exports, an official flash estimate showed. That was a shade higher than the 4.4% y-o-y growth in the first three months of the year.

The median estimate in a Bloomberg survey of economists, meanwhile, called for a steady 4.5% growth in the second quarter from a year earlier. The Department of Statistics Malaysia will release the comprehensive second estimate data on Aug 15.

For BIMB Securities, the outlook for the second half of the year is dim, clouded by escalating external headwinds even as domestic demand is expected to remain resilient. The potential 100% tariff on semiconductors produced outside the US is of particular concern, the research house said.

Electrical and electronics make up around 40% of Malaysia’s total exports, with about 20% destined for the US market. “Any disruptions in this segment could weigh heavily on Malaysia’s export performance, particularly in semiconductors segment,” BIMB Securities cautioned.