Malaysia's economy grows 5.6% in 1Q, driven by manufacturing & agriculture

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KUALA LUMPUR (May 19): The Malaysian economy grew at 5.6% in the first quarter of 2017 (1Q17), against 4.5% a year earlier, driven by the manufacturing and agriculture sectors, according to the Department of Statistics Malaysia.

In a statement today, the department said that on a quarter-on-quarter basis, the economy for the quarter grew at 1.8%.

It said all sectors on the production side posted a favourable growth except for the mining and quarrying sector.

The Statistics Department said that on the expenditure side, private final consumption expenditure and gross fixed capital formation were the main catalysts for the growth.

Sector wise, the services sector recorded a steady growth of 5.8% in this quarter (4Q16: 5.5%) mainly led by wholesale & retail trade, which expanded to 6.3%, while information & communication remained sound by posting a growth of 8.2%.

Meanwhile, business services grew at 8.4% due to a favourable momentum in professional activities.

The department said manufacturing sector rose to 5.6%, a faster pace than 4.7% in the previous quarter, spearheaded by electrical, electronic & optical products (7.9%), mainly in production of printed circuit boards and semiconductors.

It said this sector's performance was further supported by petroleum, chemical, rubber & plastic products (3.1%), and vegetable and animal oils & fats and food processing (8.2%).

Meanwhile, the agriculture sector rebounded to a sturdy growth of 8.3% on a year-on-year basis after posting a negative growth of 2.5% in the previous quarter.

The department said the agriculture sector's turnaround was impelled by oil palm, which accelerated to a double-digit growth of 17.7% (4Q16: -7.2%) following a higher yield of fresh fruit bunches in this quarter.

It said the growth was also supported by rubber at 23.5% (4Q16: 1.1%) due to a higher price and production.

Nevertheless, it said forestry & logging and marine fishing declined to negative 11.1% and 4.1% respectively.