Nor Shamsiah says private sector activities remain the key driver of growth with domestic demand up by 4.6 per cent, while private consumption expanded by 7.8 per cent. — Bernama photo
KUALA LUMPUR: The Malaysian economy grew by 4.9 per cent in the second quarter of 2019 (2Q) from 4.5 per cent in the first, supported by higher household spending and private investment.
Bank Negara Malaysia governor, Datuk Nor Shamsiah Mohd Yunus said private sector activities remained the key driver of growth with domestic demand up by 4.6 per cent, while private consumption expanded by 7.8 per cent.
“Malaysia’s growth accelerated despite global headwinds, supported by the recovery from commodity supply disruptions and improved performance in the manufacturing and construction sectors,” she told a media conference on Malaysia’s second-quarter 2019 gross domestic product (GDP) performance yesterday.
On the supply side, the mining sector rebounded, driven mainly by the recovery in natural gas output, while improved growth in the manufacturing sector was supported by a better performance of the domestic-oriented industries.
For the quarter, headline inflation averaged higher at 0.6 per cent (-0.3 per cent in 1Q), mainly reflecting the lapse in the impact of the Goods and Services Tax (GST) zerorisation implemented in June 2018.
Core inflation, excluding the impact of consumption tax policy changes, was unchanged at 1.6 per cent.
Going forward, she said Malaysia’s GDP is expected to grow within the range of 4.3 per cent and 4.8 per cent for 2019, supported by private sector activity.
However, the external sector would likely continue being affected by slower global growth, amid ongoing trade tensions between the United States and China.
The ongoing trade dispute is projected to weigh on the county’s 2019 baseline gross export growth by -0.5 to -0.8 percentage point (ppt).
Furthermore, the impact of lower trade activity on growth is also compounded by increased business uncertainty and should the trade dispute further escalate, this could potentially reduce Malaysia’s export growth by up to an additional -0.2 ppt and GDP growth by approximately -0.1 ppt in 2019.
Meanwhile, Nor Shamsiah said the two upside risks to Malaysia’s GDP are positive outcomes from trade negotiations between the two economic giants, and lower-than-expected inflation lifting private consumption activity. — Bernama