By Siti Radziah Hamzah & Karina Imran
KUALA LUMPUR, Aug 18 (NNN-Bernama) — Malaysia’s economy expanded by 2.9 per cent in the second quarter of 2023 (2Q 2023), supported by improving labour market and the continued increase in domestic demand and tourism activities, according to the Department of Statistics Malaysia.
Chief statistician Mohd Uzir Mahidin said Malaysia’s economic growth moderated during the quarter, partly due to weaker external demand amidst the global technology cycle, lower commodity production and high base effect from 2Q 2022, which recorded gross domestic product (GDP) growth of 8.9 per cent.
Malaysia posted a GDP growth of 5.6 per cent in 1Q 2023, bringing the average growth for the first half of the year (1H 2023) to 4.25 per cent.
On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1.5 per cent (1Q 2023: 0.9 per cent).
Bank Negara Malaysia (central bank) Governor, Abdul Rasheed Ghaffour said Malaysia’s economy remains on track to achieve a growth of between 4.0 per cent to 5.0 per cent this year, backed by the labour market’s continued recovery, implementation of projects and rising tourism activities.
He added that the Madani Economy Framework would drive the comprehensive restructuring of the Malaysian economy.
Inflation
Speaking at a press conference here Friday, Abdul Rasheed said the headline inflation is expected to be between 2.8 per cent and 3.8 per cent in 2023, due to the moderation in core inflation and gradual subsidy rationalisation.
“Core inflation, while declining, remained elevated relative to its long-term average (2011-2019 average: 2.0 per cent),” he said.
He noted that both non-core inflation and core inflation had moderated, where fresh food and fuel contributed to the decline in non-core inflation, while the moderation in core inflation (2Q 2023: 3.4 per cent; 1Q 2023: 3.9 per cent) was largely contributed by selected services.
These include food away from home, telephone and telefax services, and personal transport repair and maintenance.
“Inflation pervasiveness declined as the share of Consumer Price Index (CPI) items recording monthly price increases moderated to 42.7 per cent during the quarter (1Q 2023: 56.0 per cent), below the second quarter long-term average (2011-2019) of 43.9 per cent.
“Notably, inflation pervasiveness dropped in June after a transitory uptick in May following the festive season,” Abdul Rasheed said.
As for 2H 2023, both headline and core inflation are projected to trend lower within expectations, partly due to the higher base in 2H 2022.
Nonetheless, he noted that risks to the inflation outlook are subject to the changes to domestic policy on subsidies and price controls, as well as global commodity prices and financial market developments.
Outlook
Moving forward, the central bank governor said the economic growth will continue to be supported by domestic demand amid improving employment and income as well as the implementation of multi-year projects.
Tourist arrivals are expected to continue rising, which would support tourism-related activities.
“Risks to Malaysia’s growth outlook are subject to downside risk stemming primarily from weaker-than-expected global growth.
“There are, however, upside risk factors such as stronger-than-expected tourism activity and faster implementation of projects,” he added.
— NNN-BERNAMA
