Malaysia GDP Growth Rebounds More Than Estimated

(RTTNews) - Malaysia's economy logged a stronger-than-estimated rebound in the first quarter on household spending and investment, the second estimate from the Department of Statistics showed on Friday.

Gross domestic product grew by a revised 4.2 percent on a yearly basis in the first quarter, the fastest expansion since the first quarter of 2023.

The first quarter growth was revised up from 3.9 percent and followed a 2.9 percent expansion in the final three months of last year.

On a quarterly basis, the Malaysian economy rebounded by a revised 1.4 percent, reversing a 1.0 percent contraction in the fourth quarter of 2023.

The expenditure-side breakdown showed that household spending gained 4.7 percent annually, faster than the 4.2 percent rise a quarter ago.

The increase largely reflects higher spending on housing, water, electricity, gas and other fuels and on food and non-alcoholic beverages.

Driven by spending on supplies and services, state expenditure growth improved to 7.3 percent from 5.8 percent.

Gross fixed capital formation advanced at a pace of 9.6 percent after rising 6.4 percent a quarter ago.

Exports posted an annual increase of 5.2 percent, in contrast to the decline of 7.9 percent a quarter ago. Imports surged 8 percent following a drop of 2.6 percent in the prior period.

All sectors on the supply side showed better growth with services and manufacturing continued to propel the overall performance. The service sector posted 4.7 percent growth and manufacturing climbed 1.9 percent.

The mining and quarrying sector grew 5.7 percent and farm output moved up 1.6 percent. At the same time, the construction sector registered an encouraging growth of 11.9 percent.

Despite the upward revision to growth, Capital Economics economist Shivaan Tandon said the economy is set to log below-trend GDP growth this year as a whole.

The softening labor market, tighter fiscal policy and soft foreign demand are likely to weigh on economic activity in the coming quarters, the economist noted.

Separately, the statistical office said the current account surplus surged to MYR 16.2 billion in the first quarter from MYR 0.9 billion in the prior quarter. This notable increase was mainly fueled by the income and goods accounts.