The gross domestic product (GDP) of Malaysia increased 4.7% in the final quarter of the last year on a year-on-year basis mainly riding on the back of private sector activity that propelled growth, whereas a bounce in goods and services exports contributed towards net export growth, the country’s apex lender Bank Negara Malaysia (BNM) stated.
The central bank stated that the entire-year 2018 GDP growth remained at 4.7%, while for the fourth quarter of 2018 key sectors continued to expand on the supply side. The services sector was backed by continual strength in consumer spending, mainly in the retail segment, while surge in the manufacturing sector was propelled by the electrical, electronics, and consumer-related clusters.
The GDP growth of the entire 2018 was marginally short of the government’s estimate of 4.8% but far below the 5.9% in the year-ago period. The government previously stated that it anticipated the entire-year growth in 2019 to be at 4.9%.
Goods-related sectors continued to recover from manufacturing disruptions faced since the second quarter, with higher growth in agricultural and mining sectors.
Headline inflation slumped to 0.3% in the third quarter of 2018 mainly because of transport inflation turning negative. The joint result of the zeroization of the commodities and services tax and the implementation of the sales and services tax continued to exert a total negative impact to headline inflation in the quarter.
In the future, the Malaysian economy is anticipated to remain on a stable growth path, as per Bank Negara Malaysia.
The central bank stated that the private sector demand is anticipated to remain the chief growth driver in the middle of continuing financial rationalization while the external sector may soften with moderating international demand. Private consumption remained a significant driver of the economy, however, it increased at a marginally slower pace of 8.5% in the final quarter of 2018 as against 9% in the third quarter of the year.
As per the monetary authority, the headline inflation is anticipated to average moderately higher.
The consumption tax policy impact on headline inflation in the on-going year will begin to lapse towards the 2019-end. The underlying inflation that excludes the impact of the changes in consumption tax policy is anticipated to be largely stable in the present year in the absence of robust demand pressure, the central bank stated.
The Southeast Asian country’s trade surplus increased a yearly 6.9% in the final quarter to RM34.6 billion. However, in the trade surplus declined 4.1% in the third quarter compared to the corresponding period in the previous year.
Malaysia’s current account surplus increased to RM10.8 billion for the fourth quarter of 2018. Bank Negara Malaysia anticipates inflation to be higher on average in 2019 after gentle cost pressures in the last year. The inflation rate for the entire-year 2018 was at 1 per cent.