Malaysias GDP growth in Q3 up 5.2%

The Malaysian economy recorded a 5.2% growth in the third quarter of the year, surpassing economists' forecast of 4.8%.

The expansion was driven by increases in domestic demand and investment.

At the briefing to announce the quarterly economic performance in Kuala Lumpur, Central Bank of Malaysia Governor, Tan Sri Dr Zeti Akhtar Aziz said the growth was supported by domestic demand, particularly in the favourable performance of both private and public consumption and investment, while noting that the slower external demand has led to a drop in net real exports of goods and services.

Both the private and public sectors continued to invest in the local economy with gross fixed capital formation recording a 22.7% growth in the third quarter.

Private investments were mainly in the domestic-oriented services sector, particularly in transportation, real estate and utilities sub-sectors as well as the oil and gas projects currently being implemented.

Public investments by government-owned enterprises were mainly in areas such as transportation, oil and gas and utilities, while the Federal Governments development spending were mainly in transportation, education and public utilities.

All sectors of the economy except mining and quarrying expanded in the third quarter.

The Services sector expanded by 7.0% driven by the strong performance of the Finance & Insurance sub-sector with growth of 11.8% and Wholesale & Retail Trade sub-sector with an expansion of 4.4%.

The Communication and Business Services sub-sector remained stable with growth of 9.1% and 8.1% respectively.

The Manufacturing sector recorded a 3.3 % growth in the third quarter led by the Non-Metallic Mineral Products, Basic Metal and Fabricated Metal Products which grew by 9.3% in tandem with the strong performance in the construction sector.

The Petroleum, Chemical, Rubber and Plastic Products registered a growth of 2.8%, due mainly to the 11.4% expansion in Plastic Products while the Transport Equipment & Other Manufactures posted growth of 4.8%, supported by the robust activities in ship building and ship repair.

The Construction sector continued to register double-digit growth with a 18.3% growth in the third quarter, supported by a 28.5% expansion in Civil Engineering especially in the mass rapid transit mega project and the building of the second Penang bridge.

The Residential segment also posted a strong 16.4% growth. Non-Residential segment also strengthened with a growth of 13.4% due mainly to an increase in industrial projects.

The Mining and Quarrying sector contracted by 1.2% in the third quarter due mainly to a drop in the production of natural gas and crude oil following scheduled shutdown of facilities.

The Agriculture sector recovered to record a marginal expansion of 0.5%, supported by better performance in Livestock, Fishing and Other Agriculture especially vegetables and fruits as well as a recovery in crude palm oil production.

Going forward, Tan Sri Zeti said the fourth quarter gross domestic product (GDP) growth would likely continue like the third quarter with expected continued robust domestic demand while exports are expected to remain weak due to the global slowdown.

For the whole year of 2012, Central Bank of Malaysia expects a growth of at least 5% or better, she added.

Source: Adapted from New Straits Times and StarBizWeek, Central Bank of Malaysia and Department of Statistics Malaysia websites