Kuala Lumpur, Aug. 12, (dpa-AFX/GNA) - Malaysia’s economy grew at the fastest pace in a year in the second quarter as household spending strengthened on the labour market’s recovery, official data showed on Friday.
Growth accelerated to 8.9% in the second quarter from 5% in the first quarter, the central bank reported.
The rate was the fastest since the second quarter of 2021 and also exceeded economists’ forecast of 6.7%.
Private consumption expenditure grew the most by 18.3%, following a 5.5% rise a quarter ago, underpinned by higher consumption in transport, food and non-alcoholic beverages and restaurants and hotels.
Driven by positive growth in all types of assets, gross fixed capital formation advanced 5.8%, faster than the 0.2% gain a quarter ago.
Meanwhile, growth in government spending moderated to 2.6% from 6.7%.
In the first half of the year, the economy grew 6.9% but was slightly weaker than the 7% increase in the first half of 2021.
The Malaysian economy is projected to expand further for the remainder of the year.
Central bank governor Tan Sri Nor Shamsiah said: “While external demand could face headwinds from slower global growth, the Malaysian economy will continue to be supported by firm domestic demand.”
Growth would also benefit from improving labour market conditions and higher tourist arrivals, as well as continued implementation of multi-year investment projects, the banker said.
Nonetheless, the governor cautioned that growth remains susceptible to weaker-than-expected global growth, further escalation of geopolitical conflicts and worsening supply chain disruptions.
Growth will slow further from here, Gareth Leather, an economist at Capital Economics said. But he said the slowdown is likely to be relatively mild, with the reopening of the international border set to provide decent support to activity.
The economist expects economic growth to slow from 8.5% this year to 5.5% in 2023.
GNA