GDP growth slows to 4.4% in 3Q19

• Economy expanded by 4.4% in 3Q19

• Growth continued to be anchored by domestic demand, albeit at a slower momentum

• Services and manufacturing sectors continued to support growth

• Current account surplus driven by higher goods surplus

• Lower net inflow for FDI

• 2019 growth forecast revised lower to 4.5%

While Malaysia surprised the market last quarter when it announced the 4.9% yoy growth for 2Q19, GDP for 3Q19 came in at 4.4% yoy, in line with market consensus but slightly lower than our expectation of 4.5% yoy. On a quarter-on-quarter seasonally adjusted basis, the economy grew by 0.9% (2Q19: 1.0%).

The moderation was primarily attributed to lower growth in key sectors and a decline in the mining and construction activities. On the demand side, most domestic demand components and net exports registered slower growth momentum. The economy grew 4.6% for the three quarters of 2019 with a value of RM1.05tn at constant prices and RM1.11tn at current prices.

The economy remains in expansion mode supported by domestic demand particularly private consumption and government spending. On the other hand, sluggish investment activities and weak external sector continue dampening the growth. On the supply side, growth was supported by services, manufacturing and agriculture sectors.

Source: BIMB Securities Research - 18 Nov 2019