KUALA LUMPUR- Malaysia’s economy likely grew 5.3 percent in the third quarter from a year earlier, slower than the previous three-month period, official advance estimates showed on Monday.
In the second quarter, gross domestic product had expanded by an annual 5.9 percent, its fastest rate in 18 months, on higher household spending, exports and investment.
The government last week raised its forecast for economic growth in 2024 to 4.8 percent to 5.3 percent, from 4 percent to 5 percent previously.
Growth in the third quarter was driven by the services sector, which rose 5.1 percent from a year earlier, as well as expansion in the manufacturing, construction and agriculture sectors, data from the Statistics Department showed.
However, the mining and quarrying sector fell 3.4 percent year-on-year due to a decline in the natural gas and crude oil and condensate sub-sectors, the department said.
Exports rose 7.8 percent in the third quarter from a year earlier, while imports were up 20.8 percent, the data showed.
Chief Statistician Mohd UzirMahidin said a stable labor market, moderate inflationary pressure, accommodative fiscal and monetary policies, and an ongoing recovery in tourism were expected to support the economy.
“Additionally, positive trends in consumer spending and rising investment are set to spur the economic growth in this quarter,” he said in a statement.
Final third-quarter GDP figures are expected to be released on Nov. 15.
Malaysia will likely introduce further subsidy cuts and new taxes as part of its budget for next year, analysts and economists said, as it looks to strengthen its fiscal position amid expectations of falling government revenue.
Prime Minister Anwar Ibrahim is set to announce the government’s spending plan for 2025 in parliament, aiming to balance fiscal consolidation and economic growth while alleviating rising living costs.
He is likely to announce steps to implement a tax on high-value goods first mooted in the previous budget as well as a tax on sugar-sweetened beverages, analysts and economists said.
The government is also likely to revise its economic growth projection to 4.5 percent to 5.1 percent for 2024 from the previous range of 4 percent to 5 percent, said Mohd Afzanizam, who expects the economy to grow 5 percent in 2025.
The central bank forecasts 2024 growth at the upper end of 4 percent to 5 percent this year, while it does not expect headline or core inflation to exceed 3 percent. The economy expanded 5.9 percent in the second quarter from a year earlier, its fastest pace in 18 months.
