Photographer: Goh Seng Chong/Bloomberg

Malaysia's Growth Quickens to Two-Year High, Beating Forecasts

  • Economy grows 5.6% y/y in first quarter; median estimate 4.8%
  • Private sector consumption rises 6.6% from a year earlier

Malaysia’s economy grew at the fastest pace in two years last quarter, lifted by an export recovery and stronger private consumption and investment.

Key Points

  • Gross domestic product rose 5.6 percent from a year earlier, Bank Negara Malaysia said in a statement Friday. Growth was 4.5 percent in the fourth quarter
  • The median estimate of 22 economists surveyed by Bloomberg was 4.8 percent
  • Compared with the previous quarter, GDP rose 1.8 percent versus the 1.2 percent economists had forecast

Big Picture

Malaysia’s economy is picking up speed, driven by household spending and a recovery in exports that’s helped by higher oil prices. The central bank forecast growth of as much as 4.8 percent this year from 4.2 percent in 2016.

Bank Negara Malaysia last week kept interest rates unchanged and said the growth momentum will be sustained this year. While there are risks including rapid credit growth among households and companies and rising prices, the ringgit has rebounded and foreigners are returning to the bond market.

Click to read Bank Negara’s comments after its rate decision

Other Details

  • Private sector demand, which makes up 70 percent of GDP, surged 8.2 percent in the first quarter from a year earlier, up from 5.9 percent in the previous three months, led by a jump in investment
  • Government expenditure climbed 5.8 percent, rebounding from two quarters of contraction
  • Exports growth accelerated to 9.8 percent from 2.2 percent
  • Growth in services quickened to 5.8 percent
  • Manufacturing climbed 5.6 percent

— With assistance by Michael J Munoz, Norman P Aquino, and Anisah Shukry

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