KUALA LUMPUR, Aug 18 — Malaysia’s economy is expected to maintain its rapid growth this year and the next two years, with full year Gross Development Product (GDP) growth surpassing 5.0 per cent annually, said IHS Markit.
IHS Markit Asia Pacific Chief Economist Rajiv Biswas said a key factor driving a strong performance in the second quarter of 2017 was a sharp improvement in net exports, reflecting sustained rapid export growth combined with a moderation in the pace of import growth.
“The buoyant pace of GDP growth in 2Q reflected strength across most industry sectors, led by construction which grew by 8.3 per cent year-on-year (y-o-y).
“The manufacturing sector also was an important growth engine, expanding at a pace of 6.0 per cent y-o-y and the rapid growth of electronics exports has been a key factor underpinning the buoyant performance of Malaysian manufacturing growth in 2Q,” he said in a statement.
According to Bank Negara Malaysia’s 2Q17 Report released today, Malaysia’s GDP grew 5.8 per cent from 4.0 per cent in the same quarter last year.
The outlook for the Malaysian electronics sector remains favourable in the 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.
However, despite the strong headline GDP growth rate, there were pockets of weakness, with the pace of expansion of domestic demand moderating to 5.7 per cent y-o-y in 2Q17 from 7.7 per cent y-o-y in 1Q17, while public spending slowed sharply 0.2 per cent from a pace of 5.8 per cent y-o-y in Q1.
For the first half of this year (1H), the Malaysian economy grew at a very strong pace of 5.7 per cent y-o-y, he said, adding that the economic growth is still expected to remain robust in 2H, boosted by continued strong construction spending and rapid growth in manufacturing output. — Bernama