Malaysia's economy grew 4.5% in Q4 2016, full-year growth at 4.2%

Malaysia's economy grew 4.5% in Q4 2016, full-year growth at 4.2%
PHOTO: AFP

KUALA LUMPUR - Malaysia's economy growth expanded at 4.5 per cent in the fourth quarter of 2016, which was flat when compared to a year ago, underpinned by the manufacturing and services sector, Bank Negara Malaysia (BNM) said on Thursday.

The central bank said for 2016, the gross domestic product (GDP) reported lower growth of 4.2 per cent, which was slightly lower from 5 per cent.

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

The 4.5 per cent growth in the fourth quarter of 2016 and the 4.2 per cent expansion in 2016 were within the range projected by Treasury.

BNM said the Q4 2016 growth was supported by the continued expansion in private sector expenditure. On the supply side, growth continues to be driven by the manufacturing and services sectors.

"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, private consumption grew by 6.2 per cent (3Q 2016: 6.4%), supported by continued wage and employment growth.

"Private investment registered a growth of 4.9 per cent (3Q 2016: 4.7%), 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%) 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.

"On the supply side, growth in the manufacturing, mining and agriculture sectors improved," BNM said.

In the Q4 2016, the manufacturing sector expanded at a faster pace at 4.8 per cent owing to higher growth in both domestic and export-oriented industries.

The mining sector recorded an improvement of 4.9 per cent due to the increase of natural gas production during the quarter.

In the agriculture sector, economic activity contracted at a slower pace at -2.4 per cent, reflecting the diminishing impact of El Niño on crude palm oil yields.

Growth in the services sector continued to expand at 5.5 per cent, 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, recording a growth of 5.1 per cent.

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