By Chester Tay
Malaysia’s economy expanded at a faster-than-expected pace in the first quarter, driven by consumption activities amid a recovery in labor market conditions.
The economy grew 5.0% from a year earlier, Malaysia’s central bank said Friday. In the fourth quarter, the trade-and-transit hub’s gross domestic product climbed 3.6%, buoyed by easing pandemic restrictions and strong external demand.
Economists polled by The Wall Street Journal had expected a 4.0% growth in the first quarter. Compared with the previous quarter, GDP rose 3.9%.
Bank Negara Malaysia said manufacturing activities continued to be driven by demand for semiconductors and consumer-related products, such as motor vehicles, while services sectors were buoyed by higher leisure-related spending and business-related activities amid the reopening of the economy.
The central bank said the country’s economic growth in 2022 will be supported by the continued expansion in global and domestic demand, the reopening of international borders and the improvement of labor market and income prospects. Bank Negara maintained its 2022 GDP forecast of 5.3%-6.3%.
“The outlook, however, is subject to risks related to emergence of severe (Covid-19) variant of concerns, heightened geopolitical tensions, global financial market volatility and supply chain disruptions, leading to much slower economic growth,” said the central bank.
Bank Negara reiterated its forecast for headline inflation growth to average 2.2%-3.2% this year, with core inflation expected to trend higher to 2.0%-3.0%, reflecting the improvement in economic activity and continued cost pressures.
The following are selected economic indicators released by the central bank.
1Q 2022 4Q 2021 Gross Domestic Product 5.0 3.6 Manufacturing 6.6 9.1 Services sector 6.5 3.2 Mining sector -1.1 -0.6 Agriculture sector 0.2 2.8 Private Sector Consumption 5.5 3.7 Public Sector Consumption 6.7 4.3
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