Friday, February 17, 2017

Economy Picks Up Momentum in 4Q

Economic Research
17 February 2017

Economic Update

Malaysia’s real GDP growth continued to pick up in 4Q16 with a growth of 4.5% YoY, from +4.3% in 3Q, on the back of stronger investment activities, a recovery in exports and higher inventory. For the whole year, real GDP, however, slowed to 4.2% in 2016, from +5% in the preceding year, amid a slowdown in domestic demand. Going forward, we revise our 2017 real GDP forecast upwards to a growth of 4.5% (2016: 4.2%) from our previous estimate of 4%, on account of:
    i.   A stronger-than-expected recovery in exports.
   ii.   A sustained increase in domestic demand, on the back of resilient consumer spending;
  iii.   A modest rise in public spending and private investment;
Domestic demand moderated during the quarter, dragged by slower growth in private consumption, while public expenditure fell into a contraction in 4Q.
On the external front, exports and imports gained pace in 4Q, however, net exports slowed.
On the supply side, growth was supported by a pickup in manufacturing and mining output, while agricultural activities fell by a smaller margin during the quarter.

Economist:  Vincent Loo Yeong Hong  | +603 9280 2172
Economist:  Aris Nazman Maslan  | +603 9280 2184

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