KUALA LUMPUR: Malaysia’s economy expanded at 4.5% in the fourth quarter of 2016, exceeding economists’ survey of 4.4%, underpinned by the manufacturing and services sector, Bank Negara Malaysia (BNM) said.
\nThe central bank said on Thursday, the Q4, 2016 economic growth, as measured by the gross domestic product (GDP), was flat when compared to a year ago.
\nHowever, for 2016, the GDP grew at a slower pace of 4.2% when compared with the 5% expansion in 2015.
\n\u201cOn a quarter-on-quarter seasonally-adjusted basis, the economy recorded a sustained growth of 1.4% (3Q 2016: 1.4%),\u201d it said.
\nThe 4.5% growth in the fourth quarter of 2016 and the 4.2% expansion in 2016 were within the range projected by Treasury.
\nBNM said going forward, the global economy was expected to improve but remain on a moderate growth path.
\n\u201cWhile there are indications of more sustained growth in the major economies in 2017, downside risks to global growth continue to prevail, arising from the volatility in commodity prices, policy uncertainties and growth prospects of the major developed economies, heightened risk aversions in the global financial markets as well as geopolitical developments,\u201d it said.
\nBNM said while the external environment might continue to remain challenging, the Malaysian economy will experience sustained growth with the primary driver being domestic demand.
\n\u201cPrivate consumption is anticipated to remain supported by wage and employment growth, with additional impetus coming from announced government measures to support disposable income of households.
\n\u201cInvestment activity will continue to be anchored by the on-going implementation of infrastructure projects and capital spending in the manufacturing and services sectors,\u201d it said.
\nCommenting on BNM said the Q4 2016 growth was supported by the continued expansion in private sector expenditure.
\nOn the supply side, growth continued to be driven by the manufacturing and services sectors.
\n\u201cOverall, domestic demand expanded at a more moderate pace, as the improvement in private consumption and investment activity was more than offset by the decline in public expenditure.
\nIn the fourth quarter, private consumption grew by 6.2% (3Q 2016: 6.4%), supported by continued wage and employment growth.
\n\u201cPrivate investment registered a growth of 4.9% (3Q 2016: 4.7%), following continued capital spending in the services and manufacturing sectors. Growth of public investment improved mainly on account of higher spending on fixed assets by public corporation, but nevertheless, remained in contraction during the quarter.
\n\u201cPublic consumption also declined by 4.2% (3Q 2016: +2.2%) arising from the rationalisation of spending on supplies and services and a moderation in the growth of spending on emoluments.
\n\u201cOn the external front, net exports contributed positively to growth as real exports expanded at a faster rate than real imports.
\n\u201cOn the supply side, growth in the manufacturing, mining and agriculture sectors improved,\u201d BNM said.
\nIn the Q4 2016, the manufacturing sector expanded at a faster pace at 4.8% owing to higher growth in both domestic and export-oriented industries.
\nThe mining sector recorded an improvement of 4.9% due to the increase of natural gas production during the quarter.
\nIn the agriculture sector, economic activity contracted at a slower pace at -2.4%, reflecting the diminishing impact of El Ni\u00f1o on crude palm oil yields. Growth in the services sector continued to expand at 5.5%, albeit at a more moderate pace, supported mainly by consumption-related services.
\nIn the construction sector, growth remained driven by the civil engineering sub-sector, recording a growth of 5.1%.
\nBNM said that in Q4, 2016, the current account surplus widened, due mainly to a higher trade surplus and narrower deficits in the income accounts.
\nThe central bank said as at Jan 31, 2017, the reserves position totalled US$95bil (RM426bil). The international reserves remain ample to facilitate international transactions. They are sufficient to finance 8.6 months of retained imports, significantly higher than the 3-month international threshold.
\nTotal gross financing raised by the private sector through the banking system, development financial institutions (DFIs), and the capital market amounted to RM316.2bil (3Q 2016: RM293.8bil).
\nOn the ringgit, BNM said it depreciated by 7.6% against the US dollar during the quarter.
\nThe ringgit also depreciated against the euro (-1.6%), the pound sterling (-2.4%) and the Australian dollar (-2.5%), but appreciated against the Japanese yen (6.3%).
\nThe ringgit also depreciated against all regional currencies, with the exception of the Korean won, by between 2.1% and 5.6%.
\nBNM said the Malaysian financial system remains resilient despite global uncertainties over policy adjustments in the major economies.
\nThe domestic banking system remains well-capitalised, with ample liquidity to support the financing needs of businesses and households.
\nAs businesses and households continue to adjust to the challenging economic outlook and higher cost of living, these financial buffers will support the resilience of the financial institutions.
\nIt cautioned that going forward, external events will continue to weigh heavily on the volatility of the domestic financial markets.
\nBNM said these include increased uncertainty over political developments and growth in the major economies as well as volatile commodity prices.
\n\u201cDomestic financial system stability is nonetheless expected to be preserved given the loss absorption capacity of financial institutions supported by strong capital and liquidity buffers\u201d, it added.<\/p>\n","protected":false},"excerpt":{"rendered":"
KUALA LUMPUR: Malaysia’s economy expanded at 4.5% in the fourth quarter of 2016, exceeding economists’ survey of 4.4%, underpinned by the manufacturing and services sector, Bank Negara Malaysia (BNM) said. The central bank said on Thursday, the Q4, 2016 economic growth, as measured by the gross domestic product (GDP), was flat when compared to a […]<\/p>\n","protected":false},"author":1,"featured_media":12552,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-12529","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\n