KUALA LUMPUR, Feb 12 — Amid a sliding currency and a flirtation with default by its state investment company, Malaysia got some good news today: its economy unexpectedly accelerated last quarter.

The bad news: the pickup probably won’t last.

Gross domestic product rose 5.8 per cent in the three months through December from a year earlier, after climbing 5.6 per cent in the third quarter, the central bank said in Kuala Lumpur today. That beat all estimates in a Bloomberg News survey of 22 economists where the median was for a 5 per cent increase. The economy grew 6 per cent in 2014.

Private consumption and investment have supported expansion in the Southeast Asian nation, even as the commodity producer’s exports slow. Crude prices at half the level of a year ago are curbing revenue and forcing the government to cut spending, with Prime Minister Datuk Seri Najib Razak saying in January growth may be weaker than initially estimated in 2015.

“Despite today’s upside surprise, we remain cautious on the 2015 outlook, and a slowdown in economic activity remains our base case,” said Lim Su Sian, an economist at HSBC Holdings Plc in Singapore. “The slump in oil prices is also likely to have a more pronounced impact on exports going forward.”

Ringgit falls

The currency has fallen about three per cent against the US dollar this year, one of the two worst performers among major Asian currencies tracked by Bloomberg. The ringgit slid to 3.6375 on January 29, the weakest level since April 2009, data compiled by Bloomberg show. It extended declines today.

The economy is projected to expand 4.5 per cent to 5.5 per cent this year, Najib said January 20, compared with an earlier forecast of as much as six per cent growth. The central bank left its benchmark interest rate unchanged for a third straight meeting in January.

“The Malaysian economy is expected to remain on a steady growth path,” the central bank said today. “The gradual recovery in global growth will lend support to manufactured export performance, although overall export growth would likely remain modest amid lower commodity prices.”

Export growth slowed to 1.5 per cent in the fourth quarter from a year earlier, after increasing 2.8 per cent in the previous three months. Manufacturing growth eased to 5.2 per cent, while investment climbed 4.3 per cent.

Consumption levy

Bank Negara Malaysia said private consumption is expected to moderate. While it quickened from a year earlier, private spending shrank 2.6 per cent last quarter from the previous three months. That may weaken further, with sentiment hurt by a new consumption tax of 6 per cent that is set to start in April.

“Malaysia won’t repeat the performance last year as exports will struggle because of falling oil prices,” said Chua Hak Bin, an economist at Bank of America Corp.’s Merrill Lynch in Singapore. “Consumer spending will buckle because of the goods and services hike from April, and also stricter access to credit.”

State investment company 1Malaysia Development Bhd. hadn’t been able to repay a RM2 billion loan owed to Malayan Banking Bhd. and four other lenders since November, the Edge newspaper reported January 6. It was given a third 30-day extension last month and the debt will come due at the end of February, people familiar with the matter said January 27.

“In the near term, Malaysia will be held hostage by oil prices as well as clarity on 1MDB’s debt settlement,” Weiwen Ng and Glenn Maguire, Singapore-based economists at Australia & New Zealand Banking Group Ltd, wrote in a note today. “Bank Negara Malaysia will continue to be firmly in ‘wait-and-see’ mode.”

Price pressures

Inflation this year will be between 2.5 per cent and 3.5 per cent, central bank Governor Zeti Akhtar Aziz said last month. The government in October projected consumer price gains would average four per cent to five per cent this year.

Price pressures may be limited as the government yesterday announced lower electricity tariffs from March for businesses and some consumers.

Malaysia’s current-account surplus narrowed to RM6.1 billion in the fourth quarter from RM7.6 billion in the preceding three months. That compared with the median estimate for a surplus of RM9.8 billion in a Bloomberg survey of nine analysts.

Najib unveiled measures last month that can keep more money in the country, saying the nation’s current account “must remain in surplus.” — Bloomberg