KUALA LUMPUR, Nov 17 — The Malaysian economy is on track to register higher growth of 5.2–5.7 per cent in 2017 compared to 4.2 per cent in 2016, given the continued strong performance in the third quarter.
Bank Negara Malaysia (BNM), in its “Economic and Financial Developments in Malaysia in the Third Quarter of 2017” report released here today, said domestic demand was expected to support this expansion.
It said domestic demand grew by 6.6 per cent in the third quarter of the year (2Q 2017: 5.7 per cent), supported by continued expansion in both private sector expenditure (7.3 per cent; 2Q 2017: 7.2 per cent) and public sector spending (4.1 per cent; Q2 2017: 0.2 per cent).
The central bank said the private consumption expanded by 7.2 per cent (Q2 2017: 7.1 per cent), underpinned by better labour market conditions and in particular, private sector wages were sustained amid stronger employment growth.
Private investment registered a stronger growth of 7.9 per cent (Q2 2017: 7.4 per cent) mainly in the services and manufacturing sectors, it said.
“Within the manufacturing sector, both export- and domestic-oriented sub-sectors undertook higher capital spending during the quarter.
“Business sentiments also remained above the optimism threshold, in line with favourable external and domestic demand conditions,” said BNM.
Public consumption expanded by 4.2 per cent (Q2 2017: 3.3 per cent) following faster growth in emoluments amid continued prudence in spending on supplies and services, it said.
Meanwhile, BNM said, the public investment turned around to register positive growth of 4.1 per cent during the quarter (Q2 2017: -5.0 per cent) due to higher fixed assets spending by both the Federal Government and public corporations.
On the supply side, it said, the growth was supported by continued expansion across all sectors.
“Although domestic fuel prices trended upward during the quarter due to rising global oil prices, domestic fuel prices averaged slightly lower compared to the previous quarter (RON95 petrol in Q3 2017: RM2.09 per litre; Q2 2017: RM2.10 per litre),” said the central bank.
Meanwhile, core inflation was stable at 2.5 per cent during the quarter, it said.
The central bank said the percentage of the CPI basket that registered inflation of more than two per cent remained broadly unchanged (Q3 2017: 34 per cent; Q2 2017: 33 per cent).
During the quarter, labour force expansion was relatively matched by net employment gains resulting in a stable unemployment rate of 3.4 per cent (Q2 2017: 3.4 per cent), it said.
“Labour demand also improved as the number of vacancies posted on a major job search website rose to 68,794 positions in the third quarter (Q2 2017: 65,478 positions),” it said. — Bernama
Source: The Malay Mail Online