Malaysia’s economic growth likely remained moderate in third quarter: poll

MALAYSIA’S economy probably grew at a moderate annual pace in the third quarter, as strong expansion in private consumption offset declining exports, Reuters poll found.

The South-east Asian economy grew 3.0 per cent in the July-Sept. period on an annual basis, according to the median forecast of 20 economists in a Nov 8-14 poll, slightly faster than 2.9 per cent in the previous quarter.

Forecasts ranged from 1.7 per cent to 3.5 per cent. Data is set to be released on Friday (Nov 17).

“The Malaysian economy continues to be supported by a resilient domestic sector. This will help offset weakness in the export sector, which has been weighed down by tepid global growth,” said Denise Cheok, economist at Moody’s Analytics.

“Global conditions remain uncertain going into 2024. The key risks to the outlook are a resurgence of inflation, and the uncertainty surrounding the recovery in China’s economy.”

Malaysian trade is heavily dependent on China and remained sluggish last quarter but signs of a Chinese economic recovery hint at a potential upturn.

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Meanwhile, Bank Negara Malaysia (BNM) kept its key interest rate unchanged at 3.00 per cent earlier this month while acknowledging the risks to its growth outlook due to weaker-than-expected external demand and declines in commodity production.

A Reuters poll published last month predicted Malaysia’s growth to average 4.5 per cent next year, in the middle of BNM’s 4 per cent to 5 per cent forecast.

“Looking further ahead, we think the strength of the economy in Q3 will prove temporary. We expect growth to slow in the near term with high-interest rates, tighter fiscal policy and weak global growth set to drag on the economy,” wrote Shivaan Tandon, economist at Capital Economics. REUTERS