Malaysia economy expands by 4.5% in Q1 2019
Malaysia economy was able to expand above the forecasted 4.3% at 4.5% in the first quarter of 2019 despite slower growth or bigger contraction in many sectors.
Several reasons for Q1’s higher growth rate is due to Malaysia’s increased private sector spending, high net exports, and recovery in the agriculture sector, notably its crude palm oil production. In fact, the agriculture sector grew from 3.1% of Q1 2018 to 5.6% in Q1 2019.
Despite better results in Q1 2019, Malaysia saw a slower expansion rate compared to last year. Malaysia economy expanded by 4.7% in Q4 2018 and 5.3% in Q1 2018.
Malaysia on a steady growth path despite dismal sector-based performance
Several sectors that are growing slower include the services, manufacturing, and construction sectors, while the sector that contracted even wider is the mining and quarrying sector.
The services, manufacturing, and construction sectors grew 6.4%, 4.2%, and 0.3% accordingly, compared to 6.5%, 4.2%, and 0.3% from a year earlier.
Similarly, the mining and quarrying sector declined by 2.1% last quarter compared to the 0.6% contraction from the previous corresponding quarter.
As such, the GDP outlook for Malaysia economy is still dismal due to external sectors.
Despite this, the Governor of Malaysia’s Central Bank Nor Shamsiah still expects the country to continue growing steadily. The baseline growth projection for the Malaysia economy in 2019 is between 4.3% and 4.8%.
Malaysia to regain Asian Tiger status by 2021
The same sentiment is shared by Finance Minister Lim Guan Eng. In fact, Lim strongly believes Malaysia will have a stronger economy and fiscal status in 2 years and regain its Asian Tiger status.
To ensure this, the government plans to lower current debt and liabilities by renegotiating mega projects, increasing transparency within the government, repaying tax refund arrears, and managing inflation.
Foreign direct investments are also increasing while exports and current accounts are staying positive, signalling a stronger Malaysia economy in the future.