Malaysia’s GDP grew 6% last year

KUALA LUMPUR: The Malaysian economy registered a higher growth of 5.8% in the fourth quarter (Q4) of 2014 compared with 5.6% in the third quarter (Q3) of 2014, driven mainly by stronger private sector spending, said Bank Negara Malaysia (BNM).
For the full year, gross domestic product (GDP) grew 6% compared with 4.7% recorded in 2013, beating the central bank's original forecast range of between 5% and 5.5%.
"On the supply side, growth was sustained by the major economic sectors, supported by trade and domestic activities," BNM Governor Tan Sri Dr Zeti Akhtar Aziz told reporters at a briefing on the country's Q4 2014 economic performance yesterday.She added that the GDP and inflation forecasts for 2015 may, or may not be reviewed. The release of its annual report on March 11 will have updates on this.
The revised Budget 2015 announced last month put GDP growth for 2015 at between 4.5% and 5.5%.
Private investment expanded at a faster pace of 11.2% in Q4 compared with 6.8% in Q3, driven by capital spending in the manufacturing and services sectors.
Private consumption registered stronger growth of 7.8% in Q4 compared with 6.7% in Q3, supported by stable labour market conditions and continued wage growth. Unemployment rate was low at 2.8%.
"Looking ahead, the lower oil price is expected to raise household disposable income by about RM7.5 billion in 2015," said Zeti.
Public consumption expanded at a moderate pace of 2.7% in Q4 compared with 5.3% in Q3, due to slower growth in both emoluments and supplies and services but public investment continued to decline, albeit at a slower pace of 2.1% in Q4 compared with 8.9% in Q3, following a smaller contraction in spending on fixed assets by the federal government.
The services sector grew 6.4% with an expansion across all its sub-sectors while the manufacturing sector recorded a sustained growth of 5.2% supported by a stronger performance in the exports of the electric and electronic clusters.
The inflation rate averaged lower at 2.8% in Q4 compared with 3% in Q3, mainly due to the lower inflation in the food and non-alcoholic beverages category (2.7% in Q4). Inflation for the full year averaged 3.2% compared with 2.1% in 2013.
Zeti said inflation is expected to be lower this year amidst lower global oil prices as well as lower energy and commodity prices. She said the lower inflation coupled with RM7.5 billion disposable income would provide support for private consumption this year.
Malaysia's net foreign direct investment (FDI) stood at RM10.2 billion in Q4 compared with RM7.7 billion in Q3. For the full year 2014, FDI stood at RM35.1 billion, lower than RM38.2 billion in 2013.
Trade surplus was higher at RM21.5 billion in Q4 compared with RM16.8 billion in Q3. According to Zeti, the current account is expected to remain in surplus this year but narrower.
"Despite the expected low oil prices, the surplus in liquefied natural gas (LNG) and crude palm oil exports will remain sizeable," she added.
Zeti said the Malaysian economy remains resilient and will be able to withstand challenging conditions in the external environment with its diversified economic structure, an economy supported by strong fundamentals, a solid banking system that is well-capitalised as well as deep and well-developed financial markets.