Malaysia’s economy grew 4.4 per cent in 3Q19

A sunset view of Kuala Lumpur. — file pic. // Photo: Pixabay

By Adrian Lim

KUCHING, Nov 15: The Malaysian economy grew 4.4 per cent in the third quarter of 2019 (3Q19).

The growth figure was disclosed by Bank Negara Malaysia (BNM) through a statement.

The central bank observed that the growth in the Malaysian economy slowed down to 4.4 per cent in 3Q19 as compared to a growth of 4.9 per cent in 2Q19.

BNM said: “Growth in the Malaysian economy moderated to 4.4 per cent in 3Q19 (2Q19: 4.9 per cent), primarily attributed to lower growth in key sectors and a decline in the mining and construction activities.

“On the demand side, most domestic demand components and net exports registered slower growth momentum.

“On a quarter-on-quarter (q-o-q) seasonally-adjusted basis, the economy grew by 0.9 per cent,” the central bank added.

Additionally, BNM revealed that headline inflation averaged higher during 3Q19 mainly reflecting the lapse in the impact from the Goods and Services Tax (GST) zerorisation between June and August 2018.

It noted the core inflation, excluding the impact of consumption tax policy changes, was steady at 1.5 per cent.

Meanwhile, it noted the ringgit depreciated by 1.1 per cent against the US dollar for the quarter ended September 2019.

BNM said the depreciation of the ringgit was the result of the continued heightened risk aversion in global financial markets during the quarter ended September 2019 due to an environment of worsening trade tensions and concerns on the global growth outlook.

Thus, it noted those factors had led to investors’ sustained demand for safe haven currencies, including the US dollar.

As a result, BNM observed that the US dollar broadly strengthened against most currencies, including the ringgit.

“Since October, however, the ringgit has appreciated by 0.7 per cent against the US dollar (up to November 14) following inflows into the domestic bond market due to policy interest rate cuts by global and regional central banks to address growth concerns. For the year up to November 14), the ringgit has has depreciated by 0.5 per cent against the US dollar.

Going forward, external uncertainties will continue to affect the movements of regional currencies, including the ringgit,” it believed.

Apart from that, BNM believed that the economic growth for the country is expected to be in line within projections in 2019 and the pace will be sustained going into 2020.

The central bank believed that the growth will be underpinned by private sector activity, particularly household spending, which is supported by continued expansion in employment and income.

It forecasts that headline inflation in 2020 is projected to average higher than in 2019 but remain modest.

The central bank noted the higher headline inflation figure reflects the lapse in the impact of consumption tax policy changes, the lifting of the fuel price ceilings amid the relatively subdued outlook on global oil prices and policy measures in place to contain food prices.

Nonetheless, it believed the underlying inflation is expected to remain stable, supported by continued expansion in economic activity and in the absence of strong demand pressures. — DayakDaily