The Malaysian economy grew 4.5% in the fourth quarter of 2016 compared to the same period in 2015, underpinned by continued expansion in private sector expenditure, said Bank Negara Malaysia (BNM). On the supply side, growth continued to be driven by the manufacturing and services sectors.
Growth in the fourth quarter of last year was higher than the third quarter’s growth of 4.3%. “On a quarter-on-quarter seasonally-adjusted basis, the economy recorded a sustained growth of 1.4% (3Q 2016: 1.4%),” BNM said.
However, for the whole of 2016, the GDP grew at a slower rate of 4.2%, down slightly from the 5% expansion in 2015, which analysts said is the lowest annual figure since 2009.
In the fourth quarter of 2016, domestic demand expanded at a more moderate pace, as the improvement in private consumption and investment activity was more than offset by the decline in public expenditure.
On the external front, net exports contributed positively to growth as real exports expanded at a faster rate than real imports, said the central bank.
On the supply side, growth in the manufacturing, mining, and agriculture sectors improved. Manufacturing expanded at a faster pace owing to higher growth in both domestic and export-oriented industries. The mining sector recorded an improvement due to the increase in natural gas production during the quarter.
In the agriculture sector, economic activity contracted at a slower pace, reflecting the diminishing impact of El Niño on crude palm oil yields.
Growth in the services sector continued to expand, albeit at a more moderate pace, supported mainly by consumption-related services. In the construction sector, growth remained driven by the civil engineering subsector.
Going forward, the global economy is expected to improve but remain on a moderate growth path, said BNM. While there are indications of more sustained growth in the major economies in 2017, downside risks to global growth continue to prevail, arising from the volatility in commodity prices, policy uncertainties and uneven growth prospects of the major developed economies, heightened risk aversions in the global financial markets, as well as geopolitical developments.
While the external environment may continue to remain challenging, the Malaysian economy will experience sustained growth with the primary driver being domestic demand, said BNM.
Photo: Mixabest
