Business

Malaysia’s economy grew 4.2% in 2016

bank negara

Syndicated News
Written by Syndicated News

KUALA LUMPUR, Feb 16 2017 : Malaysia’s economy recorded a 4.5 per cent growth in the last quarter of 2016, underpinned by continued expansion in private sector expenditure, leading to a full year growth of 4.2 per cent.

The 2016 Gross Domestic Product (GDP) is however, lower than the five per cent and six per cent registered in 2015 and 2014 respectively.

On the supply side, growth continued to be driven by the manufacturing and services sectors, Bank Negara Malaysia (BNM) announced today.

On a quarter-on-quarter seasonally adjusted basis, the economy recorded a sustained growth of 1.4 per cent (3Q 2016:1.4 per cent), it said.

“While the external environment may continue to remain challenging, the Malaysian economy will experience sustained growth with the primary driver being domestic demand,” it said in a statement.

The central bank said private consumption is anticipated to remain supported by wage and employment growth, with additional impetus coming from announced government measures to support disposable income of households.

“Investment activity will continue to be anchored by the on-going implementation of infrastructure projects and capital spending in the manufacturing and services sectors,” it added.

Explaining further the fourth quarter GDP growth, BNM said overall, domestic demand expanded at a more moderate pace, as the improvement in private consumption and investment activity was more than offset by the decline in
public expenditure.

In the fourth quarter 2016, private consumption grew by 6.2 per cent versus 6.4 per cent in the third quarter, supported by continued wage and employment growth.

Private investment registered growth of 4.9 per cent (3Q 2016: 4.7 per cent), following continued capital spending in the services and manufacturing sectors.

Growth of public investment improved mainly on account of higher spending on fixed assets by public corporation, but nevertheless, remained in contraction during the quarter.

Public consumption also declined by 4.2 per cent (3Q 2016: +2.2 per cent) arising from the rationalisation of spending on supplies and services and a moderation in the growth of spending on emoluments.

On the external front, net exports contributed positively to growth as real exports expanded at a faster rate than real imports.

As for the supply side, growth in the manufacturing, mining and agriculture sectors improved. The manufacturing sector expanded at a faster pace owing to higher growth in both domestic and export-oriented industries.

The mining sector recorded an improvement due to an increase in natural gas production during the quarter.

In the agriculture sector, economic activity contracted at a slower pace, reflecting the diminishing impact of El Niño on crude palm oil yields.

Growth in the services sector continued to expand, albeit at a more moderate pace, supported mainly by consumption-related services.

In the construction sector, growth remained driven by the civil engineering sub-sector. – Bernama

Comments

comments

About the author

Syndicated News

Syndicated News

News sourced from Bernama, Reuters, AFP and other accredited news agencies, including credible blogsites and news portals.