COMMENT | Malaysia’s second-quarter gross domestic product (GDP) figures released last week surprised on the upside.

The economy grew by six percent year-on-year, above the earlier advance estimate of 5.8 percent, placing Malaysia among the stronger-performing economies in the region.

However, the headline growth rate needs to be interpreted carefully and read alongside other macroeconomic and socioeconomic indicators.

Two features are particularly important in explaining why the strong GDP performance has not translated into an equally strong improvement in sentiment on the ground.

First...