In the third quarter of 2023, Malaysia experienced a 3.3% year-on-year growth in its economy, as indicated by the gross domestic product (GDP). The primary driving force behind this expansion was the substantial contribution from private-sector spending.
Gross Domestic Product (GDP) measures the monetary value of all final goods and services produced within a country during a specified timeframe, usually a quarter or a year. It serves as a key economic indicator, reflecting the overall health and size of an economy. GDP encompasses the total value of goods and services purchased by end consumers, providing insight into a nation’s economic performance and trends.
Bank Negara Malaysia (BNM) reported today that the performance during the July-September period showed improvement compared to the preceding quarter. The growth observed in the third quarter builds on the momentum from the second quarter. The central bank anticipates that household spending will continue to be a key driver, serving as a stabilizing force for overall economic growth.
“Household spending remained supported by continued growth in employment and wages. Meanwhile, investment activity was underpinned by the progress of multi-year projects and capacity expansion by firms, Weaker external demand is cushioned by resilient domestic spending,” Bank Negara Malaysia governor Datuk Shaik Abdul Rasheed Abdul Ghaffour stated during the media briefing.
In Q3 2023, the economy exhibited a 2.6% quarter-on-quarter growth, a notable increase from the 1.5% recorded in Q2 2023, as indicated by seasonally adjusted figures. The Malaysian economy, as a whole, demonstrated a robust expansion of 3.9% over the initial three quarters of 2023.
This quarter, headline inflation eased to 2%, showing a decline from the previous quarter’s 2.8%. The decrease in non-core inflation was influenced by a drop in fresh food and fuel prices. Core inflation also decreased, reaching 2.5% from the previous quarter’s 3.4%, although it remained higher than its long-term average spanning from 2011 to 2019, which stood at 2%.
The decline in core inflation was primarily influenced by specific service sectors. Notably, expenses related to dining out, such as food away from home, as well as spending in restaurants and cafés, played a significant role in moderating inflation. Additionally, the category of personal transport repair and maintenance also contributed to the overall reduction in core inflation. These selected services collectively contributed to the observed moderation in the core inflation rate during the specified period.
Looking ahead, Governor Abdul Rasheed Ghaffour of BNM expressed optimism about the Malaysian economy, stating that despite the global challenges, it is expected to grow by approximately 4% in 2023 and between 4% and 5% in 2024. The anticipated growth will be fueled by the continuous expansion of domestic demand, supported by stable employment and income opportunities, particularly within sectors focused on the domestic market. This projection underscores the resilience of the Malaysian economy in the face of external uncertainties.
“This growth performance along with other favourable economic developments would provide support to the ringgit,” he said. Malaysia’s economic landscape, as outlined by BNM Governor Abdul Rasheed Ghaffour, displays a positive trajectory despite global challenges. The forecasted growth of around 4% in 2023 and a range of 4%–5% in 2024 underscores the nation’s resilience. This outlook reflects Malaysia’s ability to navigate global uncertainties and signals a promising path for continued economic development in the coming years.
Source: Free Malaysia Today
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