The economy of Malaysia grew 4.5% in the final quarter of 2015, bringing the full-year gross domestic product (GDP) growth to 5% as against 6% in 2014.
The country had recorded GDP growth of 5.6% in the first quarter of 2015 before slowing down to 4.9% in the second quarter and 4.7% in the third.
Bank Negara Malaysia in a statement said the fourth quarter was supported mainly by private sector demand. On the supply side, growth was underpinned by the major economic sectors.
On a quarter-on-quarter seasonally adjusted basis, the economy grew by 1.5% in Q4 as compared to 0.7% in the previous quarter.
Despite the challenging economic environment during the quarter, Bank Negara said the private sector continued to be the key driver of growth.
Private consumption grew by 4.9% in the last quarter of 2015 as against 4.1% in the third quarter, supported by stable wage growth and labor market conditions.
Private investment in turn expanded by 5% against 5.5% in Q3, driven by capital spending in the manufacturing and services sectors.
Public investment however, moderated at 0.4% from 1.8% in the third quarter, following lower growth in fixed assets spending by the federal government.
Public consumption sustained growth at 3.3% from 3.5% in Q3 as the stronger growth in emoluments was offset by slower growth in supplies and services expenditure.
On the supply side, growth of the services sector in the fourth quarter was marginally higher, underpinned by consumption- and trade-related activities, mainly by domestic-oriented industries, while that of construction was supported by the civil engineering and residential sub-sectors.
The trade surplus increased to MYR30.4 billion (US$7.2 billion) in the fourth quarter of 2015 from MYR22.2 billion in the third. Gross exports registered a stronger growth of 8.1% from the third quarter performance of 5.5%, supported mainly by the non-resource based manufactured products, particularly machinery, appliances and parts, as well as metal products.
Looking ahead
The Malaysian economy is expected to face a challenging operating environment in the immediate future, said the central bank.
“The downside risks to growth will however, remain, given the continued uncertainty in the external environment and the ongoing reforms in the domestic economy,” it added.
Though domestic demand will still drive growth with some support from net exports, it said the pace of domestic demand expansion will be moderate.
Growth in income and employment will continue to support private consumption, though moderate, as households continue to adjust to the higher cost of living.
Meanwhile, private investment is projected to moderate to below its long-term trend, but will nevertheless be supported by the capital expenditure in the manufacturing and services sectors, as well as implementation of infrastructure projects.
On the global front, BNM said the downside risks to its outlook remains elevated.
This is reflected in the reemergence of heightened volatility in the financial markets in the early weeks of 2016, following concerns over the growth prospects of the major economies, the fall in energy prices, and the global policy shifts.
Going forward, although the global economy is projected to expand further, BNM said growth is expected to be moderate and uneven.
The pace of recovery will remain modest in major advanced economies, while growth is expected to be slow in Asia with continued support from domestic demand, it added.
Country to overcome challenges
As this developed, Prime Minister Najib Tun Razak reiterated recently his confidence that Malaysia’s economy can weather the global challenges and will stay strong, stable, and on track, according to a report by Bernama.
In his latest posting on his blog, Najib said the economic success last year had placed the country among the best in the ASEAN region.
“However, we should not take things easy, but work instead on proactive measures to ensure the interest and well-being of the people is not neglected in the context of the nation’s development,” he added.
Photo: Construction equipment
