Malaysia Q1 GDP growth at 4.7%

Tuesday, 19 June 2012 04:09

Malaysia’s economy expanded by 4.7% in the first quarter of 2012, supported by growth in domestic demand, according to Bank Negara Malaysia (BNM) in releasing the first quarter data yesterday.

Gross Domestic Product (GDP) growth in the fourth quarter of 2011 was 5.2%.

BNM Governor, Tan Sri Dr Zeti Akhtar Aziz said based on the first quarter growth, the projected growth in the Malaysian economy for 2012 remains within the range of 4% to 5%, adding that normally the first quarter registers the lowest growth while the fourth quarter, the highest.

In the first quarter, domestic demand stayed resilient, registering a 9.6% increase with growth in private consumption at 7.4%, due mainly to the increase in income and stable employment market.

The high commodity prices, improved consumer sentiments, and the implementation of income support programmes had further supported domestic demand.

Gross fixed capital formation registered a double-digit growth of 16.1% in the first quarter as against 8.4% in the fourth quarter of 2011, backed by higher private investments particularly in the oil and gas sector.

Public investments, meanwhile, were mainly in the trade and industry and public utilities sectors, while capital investments by non-financial public enterprises (NFPEs) were directed mainly into the transportation and mining sectors.

All sectors of the Malaysian economy registered positive growth with the services and manufacturing sectors continued to be the main contributors.

The Services sector posted a 5% growth supported by the 6.4% expansion in Wholesale & Retail Trade and a 9.4% expansion in the Communication sub-sector.

The growth in the Communication services was attributed to the higher demand for mobile phone and data communication services. The Business Services also benefitted from the expansion in the construction and oil & gas exploration activities.

The Manufacturing sector expanded by 4.2 % in the first quarter supported by a 5.6 % expansion in Petroleum, Chemical, Rubber and Plastic Products as a result of a rebound in the production of refined petroleum products.

The Non-Metallic Mineral, Basic Metal & Fabricated Metal Products continued to post double-digit growth with a 10.2 % expansion in the first quarter, mainly due to the strong growth in fabricated metals and non-metallic mineral products.

The Construction sector saw robust growth of 15.5% spurred by the solid performance in the subsectors including Residential and Civil Engineering.

Growth in the Agriculture sector moderated to 2.1 % due to a drop in the rubber production and fishing activity.

Oil Palm posted a growth of 3.5% while Livestock and Forestry recorded expansion of 11.0 % and 5.4% respectively.

The Mining and Quarrying sector saw a rebound to a marginal growth of 0.3 % due to a turnaround in the production of crude oil to 1.3 %.

Malaysia's exports added 8 % in this quarter mainly due to higher exports of Petroleum, Manufactured Goods and Chemicals while imports increased by 6.8 % following higher imports of Machinery & Transport Equipment, Mineral Fuel & Lubricants and Chemicals.

The first quarter saw higher net inflow of foreign direct investments of RM7.5 billion compared with RM6.5 billion in the last quarter of 2011, with the investments mainly going into the oil & gas, financial & insurance and manufacturing sectors.

Malaysia's international reserves as at 15 May 2012 stood at RM417.5 billion (equivalent to US$136.1 billion), sufficient to finance 9.3 months of retained imports and was 4.1 times the country’s short-term external debt.

Malaysia continued to enjoy financial stability in the first quarter, supported by sound financial institutions and orderly financial market conditions.

Economic growth in the country is expected to be sustained with domestic demand staying firm amidst the external challenges in particular the European sovereign debt crisis which continues to post a risk to the global economy.

Adapted from the New Straits Times, StarBiz , BNM and Department of Statistics (DOS) websites.