KUALA LUMPUR – Malaysia’s economy marked stronger growth in the third quarter of this year, at 14.2% compared to 8.9% in the second quarter, Bank Negara Malaysia said.
The central bank attributed growth to strong domestic demand, improvements in the labour market and income conditions, as well as ongoing policy support.
“Exports remained supported by strong demand for E&E products. The recovery of inbound tourism lent further support to economic activity. By sector, the services and manufacturing sectors continued to drive growth,” BNM said in a statement today.
“Overall, the Malaysian economy expanded by 9.3% in the first three quarters of 2022,” it added.
For next year, the economy is expected to expand by 4.0% to 5.0%, supported by firm domestic demand amid continued improvements in the labour market.
“Growth would also benefit from the realisation of large infrastructure projects as well as higher tourist arrivals,” BNM said, also cautioning that Malaysia remained susceptible to external factors such as weaker-than-expected global growth, higher risk aversion in global financial markets, further escalation of geopolitical conflicts and re-emergence of supply chain disruptions.
As for headline inflation, BNM said it had likely peaked for this year at 4.5% during the third quarter, in September.
Headline inflation is expected to moderate for the rest of the year, it added.
“Overall, headline inflation is expected to average at 3.3% in 2022. Underlying inflation, as measured by core inflation, is expected to stay elevated for the remainder of 2022 given improving demand amid the high-cost environment.”
The ringgit had also depreciated by 4.9% against the US dollar in the third quarter of 2022.
“This reflected the continued strengthening of the US dollar amid further monetary policy tightening by the US Federal Reserve and higher investor risk aversion due to moderating global growth prospects. Nonetheless, strong domestic growth mitigated further downward external pressures on the ringgit,” BNM said. – The Vibes, November 11, 2022
