Malaysia’s economy expanded moderately by 4.9 percent in the second quarter (Q2) of 2015 as compared with 5.6 percent in the first quarter (Q1), driven mainly by private sector demand.
Malaysia is on the same page with the global economy, which also saw a moderate pace expansion, Bank Negara governor Zeti Akhtar Aziz said.
“The global economy expanded at a moderate pace in the second quarter of 2015. Growth in most Asian economies moderated in the second quarter. Domestic demand continued to support growth in an environment of weak exports,” she said.
The Malaysian economy is expected to remain on a steady growth path, with domestic demand continuing to be the key driver of growth, the governor said at a press conference held to announce the Q2 growth in Kuala Lumpur today.
“Private consumption is expected to continue to adjust to the introduction of the Goods and Services Tax (GST), although wage growth and stable labour market conditions would provide support to household spending,” she said.
In Q2, private consumption expanded at a more moderate rate of 6.4 percent as compared with 8.8 percent in Q1 as households adjusted to the GST.
Zeti said private investment grew more moderately by 3.9 percent (1Q 2015: 11.7 percent), due to a decline in spending on machinery and equipment, especially in the transportation segment, and slower investment in dwelling services.
Growth in public investment, however, turned negative in the second quarter (-8 percent) as compared with 0.5 percent in Q1, attributed mainly to the near completion of a few projects by public enterprises, which more than offset the positive growth of capital expenditure by the federal government.
Meanwhile, public consumption recorded a higher growth of 6.8 percent (1Q 2015: 4.1 percent) following the stronger expansion in supplies and services expenditure amid a sustained growth in emoluments.
On the supply side, the major economic sectors registered more moderate growth during the quarter, said Zeti.
The lower growth in the services sector was the outcome of a slower expansion in most sub-sectors, while the moderation in the manufacturing sector was due to the more modest performance in export-oriented industries, she said.
“Growth in the mining sector was affected mainly by the lower production of natural gas. The construction sector also recorded lower growth due to a moderation in real activity in the residential, non--residential and civil engineering sub-sectors,” she said.
The agriculture sector turned around to record positive growth amid higher production of palm oil.
Zeti said inflation, as measured by the annual change in the Consumer Price Index (CPI), increased to 2.2 percent in the second quarter of 2015 (1Q 2015: 0.7 percent) reflecting mainly the impact of the implementation of the GST.
“The price increases were broad-based, with all 12 categories of the CPI basket registering higher inflation in the second quarter compared to the first quarter, she said.
Meanwhile, prices in the transport category declined at a lower rate of 3.6 percent in the second quarter (1Q 2015: -7.6 percent), reflecting the upward adjustment of domestic fuel prices, she added.
- Bernama
