KUALA LUMPUR (Nov 11): Bank Negara Malaysia said Malaysia’s economy as measured by gross domestic product (GDP) grew 4.3% in the third quarter (3Q) from a year earlier, on private sector spending and net export growth.

In a statement today, Bank Negara said on the supply side, expansion in crucial sectors of the economy also contributed to GDP growth. 

"Overall, domestic demand grew at a more moderate pace, as the sustained growth in private sector activity was more than offset by the slower growth in public spending. 

"Private consumption grew by 6.4% (2Q 2016: 6.3%), supported by continued wage and employment growth, as well as the increase in minimum wage effective 1 July 2016. Private investment registered a growth of 4.7% in the third quarter (2Q 2016: 5.6%), supported primarily by continued capital spending in the services and manufacturing sectors," Bank Negara said.

The country's 3Q 4.3% GDP growth is higher than the 2Q's 4% expansion.

During the 3Q, Bank Negara said net exports grew 5.9%, amid moderate growth in the global economy. In Asia, Bank Negara said domestic demand was an important source of growth, amid persistent external demand weakness.

On Malaysia's supply side, the central bank said the services and manufacturing sectors grew 6.1% and 4.2% respectively. The mining and construction industries expanded 3.6% and 7.9% respectively.

The agriculture segment, however, contracted 5.9%. "Growth in the agriculture sector, however, remained in contraction, attributable largely to the lagged impact of El Niño on crude palm oil yields," Bank Negara said.

Looking ahead, the central bank said external uncertainties might pose downside risks to Malaysia’s economic growth prospects.

Bank Negara said it had taken into account factors, including Malaysia's export outlook and the impact of the UK's planned exit from the European Union (EU). 

"On the external front, export growth is expected to remain weak, following subdued demand from Malaysia’s key trading partners. Overall, while domestic conditions remain resilient, uncertainties in the external environment may pose downside risks to Malaysia’s growth prospects.

"Downside risks remain high, arising from uncertainties over the timing and outcome of the UK-EU negotiations, following the UK’s EU referendum, persistence of low energy and commodity prices, as well as possible disorderly market conditions arising from policy shifts in major economies. Against this backdrop, international financial market conditions will likely continue to be vulnerable to setbacks and changes in sentiments," Bank Negara said.