Commodity-specific shocks dampen Q2 GDP growth

Datuk Nor Shamsiah Mohd Yunus

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Written by Syndicated News

KUALA LUMPUR, Aug 17 2018 : Supply disruptions saw Malaysia registering a slower 4.5 per cent growth for the second quarter (Q2) of 2018 compared with 5.8 per cent in the same period a year ago, which was far lower than expected by many economists.

The country’s gross domestic product had expanded by 5.4 per cent in Q1 and the median Q2 expectation from economists was of 5.2 per cent.

Growth in the first half of 2018 was hence at 4.9 per cent compared with 5.7 per cent in the first six months of 2017.

In announcing this, Bank Negara Malaysia (BNM) Governor Datuk Nor Shamsiah Mohd Yunus attributed the reduced growth to commodity-specific shocks in the mining and agriculture sectors.

However, the services and manufacturing sectors remained the drivers of growth, aided by strong consumer spending following a tax holiday and continued demand for electrical and electronics, and consumer-related products,” she said at her maiden press conference after her appointment as the governor on July 1, 2018, having replaced Tan Sri Muhammad Ibrahim.

“Growth in the mining sector contracted due mainly to unplanned supply outages, while the agriculture sector was affected by production constraints and adverse weather conditions.

“Private sector activity continued to be the primary driver of growth as both private consumption and investment expanded strongly during the Q2,” she added.

Aggregate domestic demand grew 5.6 per cent in Q2, of which private sector consumption rose 8.0 per cent and that of investment by 6.1 per cent.

“Public sector consumption increased 3.1 per cent while public sector investment fell 9.8 per cent in Q2,” Nor Shamsiah said.

On a sectoral basis, the services, manufacturing and construction sectors grew 6.5 per cent, 4.9 per cent and 4.7 per cent respectively.

Growth in the mining sector eased by 2.2 per cent and that of agriculture was down by 4.7 per cent.  – Bernama



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