Malaysia's economic growth decelerated in the third quarter, driven by a downturn in mining production and a slowdown in the services sector, according to official data released Monday. The country's gross domestic product (GDP) increased by 5.3% year-over-year during this quarter, a decline from the 5.9% growth observed in the previous quarter, as per preliminary estimates from the Department of Statistics.
On a quarterly basis, however, GDP witnessed a robust expansion of 4.6% in the September quarter, a significant acceleration from the 0.8% rise recorded in the preceding quarter.
Dissecting the GDP from a production perspective, the service sector's growth decelerated to 5.1%, down from 5.9%. Likewise, the agriculture sector experienced a growth rate of 4.0%, a slowdown from 7.2% in the previous quarter. Conversely, the manufacturing sector's growth improved to 5.7%, up from 4.7%, whereas the construction sector saw a vigorous 19.5% increase, driven by growth in specialized construction activities and non-residential buildings.
In contrast, the mining and quarrying sector suffered a contraction of 3.4%, attributed to reduced output in the natural gas, crude oil, and condensate sub-sectors. For the first three quarters of 2024, the economy expanded by 5.1%, compared to a 3.8% growth rate during the same period last year.
The government anticipates an economic growth rate between 4.5% and 5.5% for the coming year. Capital Economics' analyst Shivaan Tandon predicts a mild slowdown in economic growth to 5.0% next year, down from an estimated 5.5% in 2024. Despite the looming inflationary pressures stemming from subsidy reductions, it is expected that the central bank will maintain steady interest rates for the foreseeable future, the economist noted.
