The Malaysian economy advanced 5.4 percent year-on-year in the March quarter of 2018, compared to a 5.9 percent growth in the previous three months and below market consensus of a 5.5 percent expansion.It was the weakest growth since the fourth quarter 2016, as private consumption, investment, exports, and government spending increased at softer paces.
In the first quarter, gross fixed capital formation expanded 0.1 percent, much slower than a 4.3 percent growth in the preceding quarter, due to a deceleration in machinery & equipment and other asset. In addition, goverment spending edged up 0.4 percent, slower than a 6.8 percent increase in the prior three months. Exports grew by 3.7 percent, lower than a 6.7 percent rise in the December quarter. Imports declined 2 percent, compared to a 7.3 percent rise in the previous three months. Meantime, private consumption increased by 6.9 percent year-on-year, following a 7 percent rise in the previous period, supported by purchases of food & non-alcoholic beverages, communication, restaurant & hotel and housing & utilities.
On the production side, growth slowed for the agriculture sector (2.8 percent vs 10.7 percent in Q4); manufacturing (5.3 percent vs 5.4 percent), and construction (4.9 percent vs 5.9 percent). On the positive note, the services grew by 6.5 percent compared to 6.2 percent increased in Q4. Also, the mining & quarrying sector edged up 0.1 percent, after declining 0.3 percent in Q4.
Moving forward, economic growth is expected to remain strong in 2018, boosted by domestic demand. Meanwhile, exports are expected to continue to benefit from favourable global demand conditions. Headline inflation is expected to average 2%-3% in 2018, due to a smaller contribution from global cost factors and a stronger ringgit exchange rate compared to 2017.
On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1.4 percent, slower than an upwardly revised 1 percent growth in the previous period.
5/17/2018 11:41:55 AM