14-2-2024 (KUALA LUMPUR) Malaysia’s economy displayed steady growth in the fourth quarter, with a rise in private consumption offsetting a decline in exports, according to economists surveyed by Reuters.
Despite Bank Negara Malaysia (BNM) implementing a cumulative 125 basis points increase in interest rates between May 2022 and May 2023, domestic consumption remained resilient, contributing to robust economic expansion.
In the period from October to December, the Southeast Asian economy expanded by 3.4 per cent compared to the same period a year earlier, as reported by a Reuters poll conducted from Feb 7 to Feb 13, which involved 23 economists. This growth rate slightly exceeded the 3.3 per cent growth observed in the preceding quarter.
Forecasts varied between 3.0 per cent and 5.8 per cent, with official data scheduled for release on Friday (Feb 16).
Alex Holmes, lead economist at Oxford Economics, remarked, “The domestic economy has been performing relatively well, although the manufacturing sector, reflecting poor export performance, has shown minimal growth.”
Holmes added, “Domestic consumption demonstrated strength throughout 2023, but recent indicators suggest a potential slowdown.”
During its Jan 23 to Jan 24 policy meeting, BNM emphasized the downside risks to growth, citing “weaker-than-expected external demand and significant declines in commodity production” as key factors.
Subdued demand from China, Malaysia’s largest trading partner, posed a significant challenge to the country’s export recovery, with exports falling by 10 per cent year-on-year in December.
Nonetheless, Malaysia’s economy expanded by 4.1 per cent in 2023, according to a separate Reuters poll, surpassing the statistics department’s initial estimate of 3.8 per cent growth. Forecasts anticipate a further increase of 4.5 per cent this year.
