Malaysia's economic growth in the second quarter exceeded initial estimates, driven by strong household consumption and investment.
According to revised figures from the Department of Statistics released on Friday, the country's gross domestic product (GDP) grew by 5.9 percent annually in the second quarter, up from 4.2 percent in the previous quarter. This marks the most robust growth since the fourth quarter of 2022, when GDP increased by 7.4 percent. The second quarter growth rate was revised upwards from an earlier estimate of 5.8 percent.
On the demand side, the economy benefited primarily from private final consumption expenditure and gross fixed capital formation.
Private final consumption expenditure saw a growth of 6.0 percent, improving from 4.7 percent in the first quarter. In contrast, government expenditure showed a more modest growth of 3.6 percent, driven by spending on supplies and services. Gross fixed capital formation expanded by 11.5 percent in the second quarter, compared to 9.6 percent in the preceding quarter.
Exports grew by 8.4 percent, bolstered by the performance of goods exports, while imports rose by 8.7 percent, influenced similarly by goods imports. On a quarterly basis, the economy expanded by 2.9 percent, a significant revision from an earlier estimate of 0.7 percent.
In the first half of the year, the economy grew by 5.1 percent, an improvement over the 4.1 percent growth recorded in the same period of 2023.
The central bank projects the economy to expand within a range of 4-5 percent this year but warns that the growth outlook is subject to both external and domestic risk factors.
Economist Shivaan Tandon from Capital Economics has indicated that a slowdown in economic growth is likely, given the expected rise in inflation, potential decline in commodity prices, and the waning boost from tourism. Tandon suggests that the central bank is likely to maintain current interest rates for the foreseeable future.
