KUALA LUMPUR (Nov 14): Malaysia’s growth accelerated in the third quarter thanks to resilient domestic demand that puts the economy on the path to hit the high end of the official forecast.
The economy remains on track to achieve growth between 4% and 4.8% in 2025, Bank Negara Malaysia (BNM) governor Datuk Seri Abdul Rasheed Ghaffour said at a news conference following the data release.
“In fact, at this rate for this year, we may record a growth rate that is closer to the upper range of this forecast,” he said.
Gross domestic product (GDP) for the July-September period expanded 5.2% when compared to the same quarter last year, the Department of Statistics Malaysia said in a statement. The reading matches the median forecast of a Bloomberg poll and was faster than the 4.4% year-on-year growth in the second quarter.
On a seasonally adjusted basis, GDP rose 2.4% quarter-on-quarter.
The central bank cautioned that exports moving forward are expected to be impacted by tariffs and more moderate external demand. However, export growth would be supported by continued demand for electronics, inbound tourism and the recovery in mining-related exports, BNM said.
“Looking ahead, global economic conditions will remain challenging and we need to keep strengthening our economic buffers to weather any headwinds that may come our way,” Abdul Rasheed said.
In the third quarter, private consumption was largely steady though the rate of growth in private investment moderated to 7.3% year-on-year from nearly 12% in the second quarter. Public consumption climbed to 7.1% and public investments were up 7.4%.
There was also a rebound in net exports, which meant exports grew faster than imports, to 17.7% in the third quarter.
“We see greater certainty” from the recently signed US-Malaysia trade deal, Abdul Rasheed said. “Exports will remain resilient.”
The services sector, which accounts for more than half of Malaysia’s economic output, held steady at 5% during the third quarter.
The expansion in the manufacturing sector picked up to 4.1% from 3.7% while mining production turned positive, growing 9.7% year-on-year in the third quarter. Construction activities grew 11.8%, a tad slower than the second quarter’s pace.