KUALA LUMPUR: Malaysia's gross domestic product (GDP) for the third
quarter ended Sept 30 expanded 5.2% year-on-year, supported by domestic
demand and investment activities.
The expansion in GDP beat
economists' median expectations of 4.8%. GDP growth in the second
quarter was revised upwards to 5.6% from 5.4%.
Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz
said at a briefing to announce the GDP data that growth in the quarter
was supported by domestic demand, especially in the favourable
performance of private and public sector consumption and investment
activities.
She noted that growth was affected by slower external
demand resulting in further decline in net real exports of goods and
services.
“The world economic environment remained challenging in the third quarter.
“Growth
in the advanced economies was uneven, with the US economy experiencing
an improvement while several other major advanced economies continued to
experience weak growth, constrained by fiscal adjustments, sluggish
labour markets and impaired financial intermediation,” Zeti said.
Moving
forward, Zeti said GDP growth trend in the fourth quarter was “likely
to continue very much like the third quarter” but added that there were
some uncertainties seen in the export sector.
“The export sector
reflects the (economic) developments in the global environment. It will
continue to remain weak because of the economic developments taking
place in the developed world. But domestic demand is expected to
continue being strong.
“And as such, the outcome (of this) is
that we will, of course, be affected by external developments as we are
not insulated but the anchor to our growth is from domestic demand and
we expect this to continue to be strong,” she said.
On Bank Negara's growth estimates for the entire 2012, Zeti said GDP growth for the full year “would be at least 5% or better.”
“This
(assumption) is given that (GDP growth in) the first three quarters
have been better than expected. In the first half of the year, the
exports sector was better than expected despite the challenging external
environment.
“But as we entered the third quarter, we see
exports became negative and it remains uncertain as how the exports
sector will perform in the fourth quarter,” she said.
Bank Negara
said that during the third quarter, domestic demand expanded by 11.4%
(versus 14% in the second quarter) while gross fixed capital formation
registered a robust performance of 22.7% from 26.1% in the second
quarter (Q2), underpinned by capital spending by both the private and
public sectors.
“Private sector investment was driven by capital
spending in the services sector, particularly the transportation, real
estate and utilities sub-sectors and the ongoing implementation of
projects in the oil and gas sector,” Zeti said.
“For public
investment, the capital spending by public enterprises was mainly
channelled into the transportation, oil and gas and utilities sectors
while the Federal Government's development expenditure was mainly
channelled into the transportation, education and public utilities
sectors,” she added.
Bank Negara noted that growth across most economic sectors had moderated in the third quarter.
The
services sector growing by 7% from 6.6% in the second quarter,
manufacturing slowed slightly with a 3.3% growth from 5.6% in the second
quarter due to a moderation in export and domestic-oriented industries
and the construction sector grew by 18.3% from 22.2% in the second
quarter, driven by the civil engineering sub-sector such as the mass
rapid transit mega project and the construction of the second Penang
bridge.
Bank Negara said the agriculture sector recorded growth
of 0.5% from minus 4.7% in the second quarter due to a recovery in crude
palm oil production, while the mining sector contracted 1.2% from a
2.3% growth in the second quarter because of declines in natural gas
production due to planned shutdown in facilities.
Economists told StarBizWeek
that the third-quarter economic growth was commendable and they were
unanimous that growth will most likely exceed 5% for the whole of this
year.
“Malaysia's GDP growth of 5.2%, which is marginally slower
than 5.6% in the previous quarter, is a gravity-defying performance.
This is testament to continued consumer spending and economic
transformation programme projects that have offset some external
headwinds,” RAM Holdings group chief economist Dr Yeah Kim Leng said.
“My
estimate for GDP growth for the third quarter was 4.5% earlier. For the
full year, it is likely to be at the higher end of the range of
forecast, likely above 5%. Of course, external risks still remain, given
the contraction in eurozone and fiscall cliff situation in the US
economy.”
Alliance Research chief economist Manokaran Mottain
said that going forward, he was confident GDP growth would still be
healthy at around 5% in 2013.
“This is in line with the
Government's continued spending to develop infrastructure and its
recently announced bonus to civil servants and cash hand-outs to
targeted groups.
“The economy (in the third quarter) is still
driven by domestic demand, led by private consumption and investment
activities, reflecting the Government's drive to stimulate income
growth, improve and develop infrastructure as well as ensuring a steady
flow of foreign capital,” Manokaran said.
By DANIEL KHOO danielkhoo@thestar.com.my
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