Malaysia’s Economy Grows 4.2 Pct In 1q, Exceeds Expectation, On Stronger Private Expenditure, Exports

KUALA LUMPUR, May 17 (Bernama) -- The Malaysian economy expanded at a higher rate of 4.2 per cent in the first quarter of 2024 (1Q 2024) from 2.9 per cent in the fourth quarter of 2023 (4Q 2023), driven by stronger private expenditure and positive turnaround in exports.

The gross domestic product (GDP) grew by 5.6 per cent in 1Q 2023. 

Bank Negara Malaysia (BNM) governor Datuk Abdul Rasheed Ghaffour said that household spending was higher amid continued growth in employment and wages. 

"Better investment activities were supported by higher capital spending by both the private and public sectors," he said when announcing the 1Q 2024 GDP performance here, today.  

Abdul Rasheed also noted that exports rebounded amid higher external demand. 

On the supply side, most sectors registered higher growth, whereby the manufacturing sector was lifted by a rebound across both the electrical and electronics (E&E) and non-E&E industries. 

The stronger growth in the services sector was driven by higher retail trade activities and continued support from the transport and storage subsector, he said. 

According to the Department of Statistics Malaysia (DoSM) chief statistician Datuk Seri Mohd Uzir Mahidin, the services sector steered the overall performance in 1Q 2024, as well as the manufacturing sector, which showed an expansion after recording a decline in the previous quarter.

“In terms of sectoral performance, the services sector expanded by 4.7 per cent in 1Q 2024 (Q4 2023: 4.1 per cent),  contributed by the wholesale and retail trade (3.8 per cent) and transportation and storage (11.0 per cent) sub-sectors.

“The manufacturing sector increased by 1.9 per cent in 1Q after recording a contraction of 0.3 per cent in the previous quarter, driven by domestic-oriented industries, mainly the manufacturing of non-metallic mineral products, basic metal and fabricated metal products (7.2 per cent),” he said. 

In addition, the mining and quarrying sector showed better growth of 5.7 per cent after recording a rise of 3.5 per cent in 4Q 2023, backed by all sub-sectors, primarily the natural gas sub-sector which expanded by 9.0 per cent.

 Mohd Uzir said the agriculture sector grew by 1.6 per cent in the 1Q 2024 (Q4 2023: 1.9 per cent) led by oil palm and livestock sub-sectors, while the construction sector registered an encouraging growth of 11.9 per cent (Q4 2023: 3.6 per cent). 

He also mentioned that both exports and imports increased by 5.2 per cent (4Q 2023: -7.9 per cent) and 8.0 per cent (4Q 2023: -2.6 per cent), respectively, after recording negative growth in the preceding quarter attributed to better external demand.

Meanwhile, touching on inflation, Abdul Rasheed said headline inflation remained moderate at 1.7 per cent during the quarter compared to 1.6 per cent in 4Q 2023, while core inflation moderated to 1.8 per cent from 2.0 per cent in 4Q 2023.

He said the modest increase in headline inflation reflects the policy adjustments to water tariffs in February and services tax for high-usage electricity in March, which increased by 20.8 per cent (4Q 2023: 2.1 per cent) and 0.7 per cent (4Q 2023: zero per cent) respectively.

The core inflation was largely driven by continued easing in the food and beverages segment. 

"Inflation pervasiveness edged higher, as the share of Consumer Price Index (CPI) items recording monthly price increases rose to 44.2 per cent during the quarter (4Q 2023: 36.3 per cent). 

"Nonetheless, this remains well below the first quarter long-term average (corresponding first quarter periods during 2011-2019) of 52.2 per cent," he said.

Meanwhile, DoSM also published the annual GDP report for 2023 which encompasses the revision of GDP data for 2021, 2022 and 2023 at 3.3 per cent, 8.9 per cent and 3.6 per cent, respectively.

The revision is based on the updates of the companies’ annual reports, Annual Establishments Survey (AES) 2021, Economic Census 2022, and the secondary data from the relevant agencies.

-- BERNAMA