Malaysia's economy tops growth expectations at 5.8 pct in Q2

Source: Xinhua| 2017-08-18 15:23:51|Editor: ying
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KUALA LUMPUR, Aug. 18 (Xinhua) -- Malaysia's economy grew beyond expectations at 5.8 percent in the second quarter, the fastest growth since the first quarter of 2015, Malaysia's central bank said Friday.

The April-June growth was supported by higher private sector spending, and also the robust expansion in real exports of goods and services following strong demand for manufactured and commodity products.

The central bank has revised up the country's full year gross domestic production (GDP) growth to more than 4.8 percent, compared to its earlier forecasts of 4.3 percent to 4.8 percent.

"We will definitely achieve GDP growth of more than 4.8 percent this year, supported by a more entrenched global recovery and positive spillovers to the domestic economy," Bank Negara's governor Muhammad Ibrahim told media when announcing the result on Friday.

The growth prospects will continue to be driven by domestic demand, with some lift from exports, he added.

However, he noted the risks ahead including the uncertain monetary policy in the world and geopolitical risks that may cause volatility.

On the second quarter result, he said the private spending continued to be the main driver of growth, with the private consumption growth accelerated to 7.1 percent.

Meanwhile, the exports for the second quarter grew at 9.6 percent, boosted by higher demand from its key trading partners especially China, the European Union and Japan.

The country also saw expansion across all economic sectors in the second quarter, led by construction which grew 8.3 percent. Manufacturing and services sectors increased by 6 and 6.3 percent respectively.

Socio-Economic Research Center's executive director Lee Heng Guie expects the economic expansion to persist in the second half driven by firming domestic demand and exports.

"We are prompted to nudge up our own 2017 projection to 5.5 percent from 5 percent," he said.

Despite the GDP growth above expectations, the United Overseas Bank (Malaysia)'s economist Julia Goh said she maintains her full year projections at 5.2 percent as she expects the country's economy to moderate to 4.7 percent in the second half.