The Malaysian economy exceeded growth forecasts of 5.8 percent to register a strong expansion of 6.4 percent in the second quarter of 2014 from 6.2 percent in the first quarter.
The growth was underpinned by higher exports and continued strength in private domestic demand, according to Bank Negara Malaysia, the country’s central bank.
On the supply side, growth in the major economic sectors remained firm, supported by trade and domestic activity.
On a quarter-on-quarter seasonally adjusted basis, the economy grew by 1.8 percent from 0.8 percent in the first quarter.
Exports and private sector activity remained the key drivers of growth during the quarter, said the central bank in an official statement. Private investment continued to register double-digit growth, expanding by 12.1 percent against the first quarter’s 14.1 percent, reflecting investments in the services and manufacturing sectors.
Private consumption increased by 6.5 percent versus 7.1 percent in the first quarter, supported by stable employment conditions and continued wage growth.
In contrast, public sector expenditure declined by 2.1 percent from the first quarter’s 2.7 percent. Public consumption declined marginally by 1.3 percent from 11.2 percent in Q1, as government spending on emoluments, and supplies and services slowed.
The services sector recorded sustained growth, supported mainly by the trade-related sub-sectors.
The manufacturing sector expanded at a faster pace, underpinned by the electronics and electrical cluster, particularly semiconductors.
The construction sector expanded at a more moderate pace, driven mainly by the residential and non-residential sub-sectors.
Meanwhile, the agriculture sector registered strong growth, reflecting higher production of palm oil.
The mining sector turned around to record positive growth, due mainly to higher production of both natural gas and crude oil.
The trade surplus amounted to RM18.4 billion (US$5.8 billion) in the second quarter of 2014 from RM26.3 billion in the first three months of the year. Gross exports grew at a stronger pace of 14.2 percent from 10.8 percent, as global economic activity continued to expand. Gross imports also increased at 8.6 percent from 5.5 percent.
For the whole year, “the Malaysian economy is expected to remain on a steady growth path,” said the bank, with private sector activity remaining as the key driver of growth.
Although it expects the growth of exports to moderate slightly in the second half of the year, “exports will continue to benefit from the recovery in the advanced economies and from regional demand.”
The central bank earlier forecast GDP expansion this year to be about 4.5 percent to 5.5 percent, but a new growth forecast will reportedly be announced by the government.
Photo: tianyake
