KUALA LUMPUR: The Malaysian economy, measured by gross domestic product (GDP), grew 4.7 percent in the fourth quarter of 2018 (4Q18), since private sector activity remained the main driver of growth, while the rebound in exports of goods and services contributed to net export growth, said Bank Negara Malaysia (BNM).
In a statement today, BNM said GDP growth for the full year 2018 stood at 4.7 percent. The central bank said that major sectors continued to expand on the supply side for 4Q18. The services sector was supported by continued strong consumer spending, especially in the retail sector, while growth in the manufacturing sector remained driven by electronics and clusters related to electricity and consumers.
“Commodities-related sectors continued to recover from production disruptions experienced since the second quarter, with higher growth in the mining and agricultural sectors.
“Headline inflation declined to 0.3% (3Q18: 0.5%), mainly due to transport inflation turning negative. The combined outcome of the zerorisation of the goods and services tax and the implementation of the sales and services tax continued to exert an overall downward impact to headline inflation during the quarter,” BNM said.
According to the central bank, the Malaysian economy is expected to stay on a steady growth path.
BNM said that demand from the private sector is expected to remain the main driver of growth in the midst of continued fiscal rationalization, while the external sector is likely to smooth with global demand moderation.
Headline inflation is expected to average moderately higher, according to BNM.
“The impact of the consumption tax policy on headline inflation in 2019 will start to lapse towards the end of the year. Underlying inflation, which excludes the impact of the changes in consumption tax policy, is expected to be broadly stable in 2019 in the absence of strong demand pressure,” it said. – THE EDGE MARKETS