KUALA LUMPUR: Malaysia's economy grew above expectation at 4.9 percent in second quarter, driven by higher household spending and private investment, the central bank said Friday.
Bank Negara Malaysia, the central bank, said in a statement that private sector activity remained the key driver of growth in second quarter, with domestic demand expanded by 4.6 percent, supported by firm household spending and slightly higher private investment, reports Xinhua.Private consumption expanded by 7.8 percent, supported by continued income growth and festive spending during the quarter; private investment expanded at a faster pace of 1.8 percent, supported by increased capital spending in the services and manufacturing sectors.
On the supply side, the mining sector growth rebounded to 2.9 percent, the first positive growth since the third quarter of 2017, driven mainly by the recovery in natural gas output.
Growth in the manufacturing sector improved marginally to 4.3 percent, supported by better performance of the domestic-oriented industries.
Services sector also continued to expand 6.1 percent amid sustained growth in the wholesale and retail trade sub-sector.
While growth in the country is expected to remain supported by private sector activity, the central bank said the external sector is likely to continue to be affected by slower global growth amid ongoing trade tensions.
Overall, the baseline projection is for the Malaysian economy to grow between 4.3 percent to 4.8 percent for the year, said the bank.In a note Friday, MIDF Research maintained Malaysia's full year gross domestic product (GDP) growth forecast at 4.9 percent on steady domestic demand amid lower overnight policy rate effects, low inflationary pressure, stable job market and positive progression in construction sector.
"On external front, we foresee slight weakening trend due to trade war effects. Nevertheless, gradual pick-up in commodity prices would support the oversea sales of crude oil and natural gas as well as palm oil in 2019," said the research house.