Malaysia’s economy up 3.3% in Q3

MALAYSIA’S economy accelerated in the third quarter, expanding 3.3 per cent from a year earlier on the back of growth in services and other sectors, the statistics department said in a preliminary estimate on Friday (Oct 20).

Activity picked up after 2.9 per cent growth in the second quarter, its slowest quarterly expansion in nearly two years, following sliding exports and a global slowdown.

In the third quarter, gross domestic product jumped 5.2 per cent quarter on quarter, rebounding from a 0.8 per cent decline in the second quarter.

The strong performance in the July-to-September period was due to growth in the services, construction and agriculture sectors, the Department of Statistics Malaysia (DOSM) said. However, it said the mining and quarrying, and manufacturing sectors contracted in the quarter.

“Overall, the sum of the first three quarters of 2023 concludes that Malaysia’s economy grew by 3.9 per cent,” DOSM said.

The Malaysian government last week forecast 2023 full-year growth of about 4 per cent, cutting its previous estimate of 4 per cent to 5 per cent.

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Gareth Leather, senior Asia economist at Capital Economics, said while the growth estimate showed an unexpected rebound in the third quarter, the economy was unlikely to sustain the momentum.

“We expect growth to slow again over the coming months, with high interest rates, tighter fiscal policy and weak global growth set to drag on the economy,” he said in a research note.

This is the first time that Malaysia has released advance estimates for quarterly GDP. DOSM said the new initiative has been “developed to meet the demand for timely macroeconomic statistics and are in line with best practices in developed countries”. The final GDP figure for the third quarter will be released on Nov 17.