Malaysia Economy Growth: A Closer Look at Q2 2023
In the face of global challenges, Malaysia’s economy has shown resilience. The second quarter of 2023 saw a growth of 2.9%, despite external demand slowing down. This growth, however, was slightly below the expected 3.3% as predicted by a Reuters poll.
Key Highlights:
- GDP Growth Trend: After a whopping 14.2% growth in 3Q22, Malaysia’s GDP growth has been moderating. It was 7% in 4Q22 and 5.6% in 1Q23.
- Inflation Rate: The headline inflation for 2Q23 was 2.8%, a decrease from 3.6% in 1Q23.
- Domestic Demand: Remains a significant growth driver, propelled by private consumption and investment.
- Tourism: A recovery in inbound tourism has helped offset slower goods export growth.
- Sectoral Growth: Services and construction sectors are growth pillars, while agriculture and mining faced challenges due to weather and maintenance.
- Future Outlook: Bank Negara anticipates the economy to grow closer to 4-5% in 2023.
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Bank Negara highlighted that the 2Q22 had seen a significant growth spurt due to the economy reopening and policy measures. This high base effect played a role in the current year’s growth percentage.
Private consumption and investment, backed by growth in employment and wages, have been the primary drivers of this growth. Investment activities saw a boost from capacity expansion, ongoing multi-year projects, and increased government spending on fixed assets.
However, it’s not all smooth sailing. The agriculture and mining sectors faced setbacks due to adverse weather conditions and plant maintenance.
Bank Negara’s governor, Datuk Abdul Rasheed Ghaffour, shared insights on the future outlook. He mentioned that while there are risks from a potentially weaker global growth, there are also positive factors. These include a surge in tourism activity and faster project implementations. He also expects a downward trend in headline and core inflation in the latter half of 2023.
Source: The Star
