Malaysia's economy expanded 3.3% YoY in 3Q23 (2Q23: 2.9%), as resilient domestic demand offset continued export weakness. On a quarter-on-quarter basis, the economy rebounded to 5.2% QoQ growth from a decline of 0.8% QoQ in the previous quarter. On a seasonally adjusted basis, the economy grew 2.6% QoQ (2Q23: 1.5%), marking the third straight quarterly growth and the strongest in 5 quarters. Correspondingly, the monthly economic performance grew at 4.2% for the month of July, moderated to 3.2%in August and 2.5% in September 2023. Over the first three quarters of 2023, Malaysia's economy grew 3.9% as compared to 9.2% in the same period of 2022
Domestic demand remained the key driver of growth, with household spending remained supported by continued growth in employment and wages whilst the tourism sector recovery, which saw increased tourist arrivals and spending, also contributed to the growth in domestic spending. The investment activity was underpinned by the progress of multi-year projects and capacity expansion by firms. On the supply side, the services and construction sectors steered the overall performance, as well as the agriculture sector, which showed a slight recovery after a decline in the previous quarter.
On the demand side, domestic demand remained resilient, rose by 4.8% YoY (2Q23: +4.5%) supported by private consumption and investment.
Private consumption or household expenditure, which contributed 62.1% to GDP, grew 4.6% (2Q23: 4.3%) supported by household spending on continued growth in employment and wages as well as easing inflation. Public consumption accelerated to 5.8% from 3.8% in 2Q23. The strong growth was due to higher spending on supplies and services. Meanwhile, growth in gross fixed capital formation (GFCF) or investment in fixed assets was sustained at 5.1% (2Q23: 5.5%) in this quarter, supported by encouraging business activities which led to sustained investment spending by both private and public sector. GFCF by the private sector moderated 4.5% (2Q23: 5.1%), while GFCF in the public sector expanded 7.5% from 7.9% in the previous quarter. Looking ahead, continued growth in domestic demand, improved supply conditions and easing cost pressures could propel further growth in investment.
On the external front, both exports and imports exports and imports declined by 12.0% (2Q23: -9.4%) and 11.1% (2Q23: -9.7%), respectively, due to weaker global demand on merchandise exports and imports. Thus, net exports falling further for the third straight quarter and declined by 22.7% in 3Q23 as compared to a decrease of 3.7% in the preceding quarter.
On the supply side, GDP growth was mainly boosted by the improvement in the services, construction and agriculture sectors. This was then partially offset by weakness in manufacturing and mining & quarrying sectors.
The services sector expanded by 5.0% (2Q23: 4.7%), driven by increased wholesale & retail trade (3Q23: 5.4%; 2Q23: 4.7%), transport & storage (3Q23: 12.8%; 2Q23: 13.5%) and business services (3Q23: 8.6%; 2Q23: 10.7%). However, several key sub-sectors namely finance and insurance, showed a smaller contraction of 0.3% (2Q23: -1.9%) and 2.4% (2Q23: -13.4%).
Construction and agriculture sectors also recorded better growth. The construction sector further grew by 7.2% (2Q23: 6.2%), driven by encouraging growth in civil engineering (14.6%), specialised construction activities (10.4%) and residential buildings (6.2%). The agriculture sector showed signs of recovery with a growth of 0.8% after a decrease of 1.0% in the previous quarter. The growth was attributed to better production in the oil palm subsector.
The manufacturing sector registered marginal contraction of -0.1% YoY , which was the first decline after 7-quarter of expansion. The drop in this quarter was mainly influenced by export-oriented activities namely electrical, electronic & optical products (-2.5%); and petroleum, chemical, rubber & plastic products (-2.4%) following higher base last year and weaker external demand. Nevertheless, domestic oriented activities continued to propel growth. The weak manufacturing output was in line with the slowdown in external trade and overall slowdown in global manufacturing activities. The mining & quarrying sector decreased marginally by 0.1% (2Q23: -2.3%), influenced by the natural gas sub-sector with a decrease of 2.2% (2Q3: -3.6%). However, other mining & quarrying (3Q23: 3.5%; 2Q23: 3.8%) and crude & condensate (3Q23: 2.1%; 2Q23: -1.5%) sub-sectors grew in this quarter.
Source: BIMB Securities Research - 20 Nov 2023
Created by kltrader | Aug 12, 2024
Created by kltrader | Aug 12, 2024
Created by kltrader | Aug 09, 2024
Created by kltrader | Aug 09, 2024