The Malaysian economy delivered strong growth in the second quarter of 2017, beating expectations and prompting Bank Negara Malaysia to forecast the country’s GDP growth to go beyond 4.8% for the whole of 2017.
In a statement, the central bank said the economy expanded 5.8% in the second quarter after climbing 5.6% in the first quarter, and rose 5.7% in the first half of the year, the economy fueled by strong local consumption and higher manufacturing production.
It added that growth remained supported by domestic demand, particularly private sector spending. From the supply side, the improvement was driven by a broad-based expansion across all major sectors.
On a quarter-on-quarter seasonally adjusted basis, the economy grew by 1.3% as against 1.8% in the first quarter of 2017.
Malaysia’s economy has been gaining traction for the past four quarters, posting the fastest pace of growth in more than two years as improvements in developed and regional markets help to propel its exports.
The Southeast Asian country’s exports climbed 9.6% in the second quarter from the preceding-year level, while imports rose 10.7%. Services, the biggest sector in the economy, increased 6.3%, and manufacturing growth accelerated to 6% from 5.6% in the same period a year earlier.
Given the strong growth in the first half of 2017, the Malaysian economy is expected to expand by more than 4.8% in 2017, said Bank Negara.
“Based on the first half figures, we expect growth to [go] beyond the forecast of 4.8% in 2017,” said Muhammad Ibrahim, the central bank governor, adding that a new projection will be announced in late October when the government tables its 2018 budget.
Domestic demand is projected to underpin this expansion. On the external front, exports are expected to benefit from the stronger-than-expected improvement in global growth.
Prime Minister Datuk Seri Najib Razak said both the International Monetary Fund and the World Bank have also raised positive predictions for growth in the country’s economy to nearly 5% this year and in 2018.
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