KUALA LUMPUR (Nov 17): Malaysia's third quarter gross domestic product (3Q GDP) growth exceeded economists' expectations as it grew by 6.2%, driven by robust private sector spending while public sector remained supportive of growth, according to Bank Negara Malaysia.

The central bank's governor, Tan Sri Muhammad Ibrahim, said that growth in advanced and global economies continued to expand and was supported by consumption and investment, benefiting Malaysia's economy.

"Given the continued strong performance in the third quarter, the Malaysian economy is on course to register growth that is close to the upper range of the official projection of 5.2-5.7% in 2017. Domestic demand is expected to support this expansion. On the external front, exports will continue to benefit from the favourable global demand conditions," Muhammad said.

Economists have on average expected 3Q GDP to grow between 5.5% and 6%.

The stronger economic growth comes on the back of a moderation in the country's headline inflation to 3.8% during the quarter. Muhammad said the volatility in the oil price continue to affect the country's inflation level.

"So far, what we have seen is that when there's a spike in the oil price, the inflation rate will go up again. For this year, we still expect the headline inflation to average between 3% and 4%, probably at the upper end of the range. As it is, the inflation rate average about 3.7% so far this year as of September this year," he added.

Under the current environment, Muhammad believes that the central bank has some flexibility to manage its monetary policy amid the normalisation of the interest rates among developed countries, especially the United States.

"Economic growth is positive. Inflation is within expectation. This gives us a bit of space to review the degree of monetary accommodation," he said.

Muhammad, however, said the monetary policy committee will continue to assess the balance of risks surrounding the outlook for domestic growth and inflation.

On the strength of the ringgit, he lauded the success of the central bank's measures introduced at the end of last year and in March this year, saying that the increasing strength of the Malaysian currency is a reflection of the country's economic strength.

He added that the ringgit is also less susceptible to speculation now.