KUALA LUMPUR (Oct 16): Malaysia’s economy expanded faster than expected in the third quarter as growth of manufacturing and services sectors offset a contraction in mining activities, official flash estimates showed.
Gross domestic product (GDP) rose 5.3% in the July-September quarter from a year earlier, according to the Department of Statistics Malaysia’s advance estimates released on Friday. That compares with the median 5.1% rise predicted in a Bloomberg survey. In the second quarter, the economy grew 6%.
On a quarter-on-quarter basis, economic growth accelerated to 4.6% from 1.9% in the second quarter.
Malaysia and Singapore have outperformed expectations, emerging relatively unscathed from the fallout of war in the Middle East. Flash data out earlier this week showed that Singapore grew 5.4% year-on-year in the third quarter, beating the 5.1% growth in a Bloomberg poll.
A global boom in semiconductor spending to cater to artificial intelligence demand has turbocharged factories in both countries.
The services sector, which accounts for more than half of the economic output, expanded 5.4% in the period, although the pace moderated from 5.9% in the second quarter. Growth was supported by wholesale and retail trade, information and communication, and finance and insurance activities.
Manufacturing growth, meanwhile, accelerated to 7.5% from 7.3%, supported by export-oriented industries, particularly electrical, electronics and optical products, as well as petroleum, chemical, rubber and plastic products.
Mining and quarrying was the only major sector to contract, declining 4.9% as crude oil and condensate production fell.
Construction expanded 6%, moderating from 6.5% in the preceding quarter. Non-residential buildings, particularly data centre projects, and specialised construction activities supported the sector’s performance.
Agriculture returned to growth, expanding 1.3% after contracting 3.7% in the second quarter, driven by oil palm and livestock activities.
The advance figures are preliminary and subject to revision. The DOSM is scheduled to release the full third-quarter GDP figures on Nov 18.
The latest reading brought growth for the first nine months of 2026 to 5.5%, compared with 4.8% in the corresponding period last year.