KUALA LUMPUR: Manufacturing and services sectors will continue to grow on a strong momentum for the rest of the year, said Bank Negara Malaysia (BNM) governor Datuk Nor Shamsiah Mohd Yunus.
In addition, domestic demand and improvement on commodity production is also expected to provide a stable growth footing to support economic growth.
Shamsiah noted aside from manufacuring and services, the private sector also remained as key driver of growth, showing significant increase in private consumption following the implementation of the Goods and Services Tax (GST) at zero rate.
"The implementation of the sales and service tax (SST) which began on September 1 had a slight impact on inflation in the third quarter," she told a media conference here today.
The services sector continued to surge to 7.2 per cent, driven by strong momentum in wholesale and retail trade as well as information and communications.
The manufacturing sector grew by 5.0 per cent from 4.9 per cent in the previous quarter due to exports of electrical and electronics products which strengthened to 6.4 per cent.
BNM and the Department of Statistics unveiled Malaysia’s third quarter gross domestic product (GDP) numbers here today.
Malaysia’s economy expanded 4.4 per cent in the third quarter of this year, slowing from 4.5 per cent in the previous quarter.
For the first nine months of 2018, the economy expanded moderately to 4.7 per cent and it is on track to record 4.8 per cent growth for the full year.
Shamsiah says the slowing economy reflects that of regional economies as many neighbouring countries saw lower GDP growth in the third quarter, including Singapore at 2.6 per cent, South Korea (2.0 per cent) and Taipei (2.3 per cent).
"Trade performance is pressured by moderate global demand amid trade tensions," she said.
On a seasonally adjusted quarterly basis, the economy grew 1.6 per cent faster than the 0.3 per cent in the previous quarter.
"Overall inflation dropped to 0.5 per cent in the third quarter of 2018, compared to 1.3 per cent in the previous quarter, reflecting the impact of zero-rated GST implementation.
"Private consumption expenditure increased to 9.0 per cent driven by higher consumption of food and beverages, communications, transportation, restaurants and hotels.
"Malaysia's current account surplus recorded RM3.8 billion compared to RM3.9 billion in the previous quarter," she said.
Shamsiah explained that the lower surplus was due to the widening deficit in net primary income following higher reinvestment by foreign investors.
Financial liabilities in the third quarter increased to RM1.81 trillion from RM1.76 trillion in the previous quarter. on the other hand, total assets expanded to RM1.69 trillion from RM1.68 trillion in the previous quarter.
She also said BNM's international reserves amounted to RM426.9 billion compared with RM423.3 billion in the second quarter.