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By Zairina Zainudin & Karina Imran
KUALA LUMPUR, Nov 11 (Bernama) -- Malaysia's economy grew by 14.2 per cent in the third quarter this year supported by continued expansion in domestic demand, firm recovery in the labour market, robust electrical and electronics (E&E) as well as non-E&E exports and ongoing policy support.
The growth was partly lifted by the low base effect, due to the strict containment measures in the third quarter last year, Bank Negara Malaysia (BNM) governor Tan Sri Nor Shamsiah Mohd Yunus said.
Given the healthy growth in the first nine months of 2022 (9M 2022), the full year 2022 growth will exceed the seven per cent that was projected earlier, said the governor.
“An economic crisis is usually associated with a severe contraction in GDP growth, higher rates of unemployment, the closure of businesses and a breakdown in financial intermediation.
“We do not see these indicators. GDP (Gross Domestic Product) has been growing for four consecutive quarters since the fourth quarter of 2021,” she said at a joint press conference with the Department of Statistics Malaysia here today.
Expansion across all economic sectors
Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the services sector expanded 16.7 per cent, manufacturing 13.2 per cent, agriculture 1.2 per cent, mining 9.2 per cent and construction 15.3 per cent.
For instance, higher consumer-related activities amid the recovery in tourism, better labour market conditions and policy support boosted the services sector and for the agriculture sector it is the higher oil palm output due to receding labour shortages and improved yields, he said.
He said private consumption continued to support growth in Q3 2022, with household spending in necessities and discretionary items recording a 15.1 per cent growth year-on-year, while public consumption grew further on higher supply and services value.
The current account recorded a surplus of RM14.1 billion or 3.1 per cent of the GDP, compared with only 1.0 per cent of GDP in Q2 2022, largely supported by higher goods surplus due to stronger exports amid high commodity prices.
Foreign direct investment rose to RM54 billion in the 9M 2022 against RM29.7 billion in the same period last year, but inflows slowed down on quarter-on-quarter basis amid higher outflow from debt instruments.
2023 GDP to grow at 4-5 per cent, risk arises primarily from external factors
Nor Shamsiah said Malaysia’s growth is expected to normalise going into 2023, amid a more challenging external environment.
She said what is important for the country is to secure its future growth prospects to further strengthen the economic fundamentals and improve its resilience while pressing on with the necessary structural reform measures.
“While the global environment is expected to be challenging in 2023, the Malaysian economy will continue to grow. The economy is projected to grow by 4.0 per cent - 5.0 per cent in 2023, and continues to surpass the pre-pandemic level,” she said.
“A steady rise in employment levels and continued improvement in wages are supportive of spending. The continuation of existing and new infrastructure projects and higher tourist arrivals are expected to support growth in 2023.”
Among the infrastructure projects are the East Cost Rail Link valued at RM50 billion, Light Rail Train 3 worth RM16.6 billion, Central Spine Road worth RM7.3 billion and the JENDELA Phase 2 amounting to RM8 billion.
The impact of a sharp slowdown in external demand would be partly mitigated by diversified export products and markets.
“Malaysia’s diversified exports would help cushion potential shocks in external demand,” she said.
The governor said risk to growth remains tilted to the downside, arising primarily from external factors, namely weaker-than-expected global growth, escalation of geopolitical tension, worsening supply chain disruptions including the impact from climate change, faster rise in cost of living and inflation, greater financial market volatility as well as political uncertainty.
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