KUALA LUMPUR (Aug 18): The Malaysian economy will maintain its rapid growth for the 2017 calendar year, with full year gross domestic product (GDP) growth exceeding 5.0%, according to IHS Markit.
In a commentary this afternoon, IHS Markit Asia Pacific chief economist Rajiv Biswas said he also expects Malaysia to register GDP growth of around 5% year-on-year (y-o-y), expected in 2018 and 2019.
Biswas said the Malaysian GDP growth in Q2, 2017 strengthened to a pace of 5.8% y-o-y, after an already buoyant 5.6% y-o-y in Q1, 2017.
He said the outlook for the Malaysian electronics sector remains favourable in coming months, with the IHS Markit Global Electronics PMI for July at a level of 55.7, still indicating strong global electronics output and new orders.
Biswas said an important positive factor in the Q2 GDP results was the continued robust growth of private consumption, which strengthened to 7.1% y-o-y in Q2, compared with 6.6% y-o-y in Q1.
However, he said public sector consumption growth slowed from 7.5% y-o-y in Q1, to just 3.3% in Q2, while government investment weakened from positive growth of 3.2% in Q1, to a negative growth of 5.0% in Q2.
“Malaysia’s rapid pace of economic growth in Q2 was driven by strong growth in construction, manufacturing, services and agriculture.
“The manufacturing sector grew at a rapid pace of 6.0% y-o-y in Q2, propelled by buoyant growth in global demand for the Malaysian electronics production.
“Malaysian exports of electrical and electronic products rose by 15.1% y-o-y in June 2017, accounting for 38% of total Malaysian merchandise exports. For the first half of 2017, electrical and electronic exports rose by 20.5% y-o-y, reflecting buoyant global electronics demand,” Biswas said.
He said a key growth driver for Q2 GDP was the rapid pace of construction sector growth, which rose by 8.3% y-o-y, boosted by construction spending on public sector infrastructure megaprojects, affordable residential housing and the construction of the Petronas RAPID petrochemicals project.