Malaysia’s GDP grew 4.2% in the first quarter, economic recovery is faster than expected

Malaysia\’s economy grew faster than initially estimated in the first quarter, driven by a rebound in private spending and exports.

Malaysia\’s economy grew faster than initially estimated in the first quarter, driven by a rebound in private spending and exports.
Bank Negara Malaysia and the Department of Statistics jointly announced on Friday (17th) that the GDP growth rate from January to March this year was 4.2%, which was higher than the initial value of 3.9% and the median estimate of the survey.
Compared with the previous quarter, it increased by 1.4%.
Not only were strong services and manufacturing output helping to drive the economy, but better-than-previously expected results in agriculture and construction further boosted overall growth.
Data showed agricultural output rose 1.6% in the quarter, up from 1.3% previously, and construction output rose 11.9% from an initial 9.8% increase.
Bank Negara Malaysia Governor Abdul Rasheed Ghaffour said forward-looking indicators showed the Malaysian economy would continue to grow.
He expects consumer spending to improve, helped by rising income levels, solid balance sheets and government support.
Malaysia\’s economic prospects in 2024 look brighter after cooling global demand last year slowed economic growth.
A continued recovery in top trading partner China could help the Southeast Asian country\’s manufacturing sector and boost tourist arrivals and investment.
Bank Negara Malaysia expects GDP to grow 4% to 5% this year on improving external demand.
Risks of a slowdown in domestic spending, a key growth driver, also appear to be receding.
Prime Minister Anwar Ibrahim said this week he was in no rush to cut fuel subsidies for fear it would spur price pressure and curb consumption.
The central bank predicts that inflation, which has been below 2% since September, could average as high as 3.5% this year if subsidies are phased out.
The central bank said its inflation forecasts were based on the assumption that the government would remove fuel subsidies in a \”gradual and sequential\” manner.
In the short term, subsidy reform may have an impact on consumption and investment, but the government\’s targeted bailout will alleviate this impact.
In addition, subsidy reform will also have a positive impact on the country: household spending will be more energy efficient and companies will be encouraged to invest in green energy.

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