Malaysia's GDP grew 3.3pc in 3Q 2023

KUALA LUMPUR: Malaysia's gross domestic product (GDP) grew 3.3 per cent year-on-year (YoY) in the third quarter (Q3) of 2023, according to Bank Negara Malaysia.

This was lifted by the expansion in domestic spending, continued improvement in labour market conditions, further recovery in tourism activities and higher construction activity.

On a quarter-on-quarter seasonally adjusted basis, the economy grew by 2.6 per cent from 1.5 per cent in Q2 2023. Overall, the Malaysian economy expanded by 3.9 per cent in the first three quarters of 2023.

Bank Negara governor Datuk Shaik Abdul Rasheed Abdul Ghaffour said growth was anchored by resilient domestic demand.

Abdul Rasheed said the investment activity was underpinned by the progress of multi-year projects and capacity expansion by firms.

"Exports remained soft amid prolonged weakness in external demand. This, however, was partially offset by the recovery in inbound tourism," he said at a press conference today.

The headline inflation continued to moderate to two per cent during the quarter from 2.8 per cent in Q2 2023.

The moderation was recorded in both non-core inflation and core inflation. For non-core inflation, fresh food and fuel contributed to the decline.

Core inflation declined further to 2.5 per cent from 3.4 per cent in Q2 2023 but remained above its long-term average (2011-2019 average at 2 per cent).

The moderation in core inflation was largely contributed by selected services, including food away from home, expenditure in restaurants and cafés, and personal transport repair and maintenance.

Overall, Abdul Rasheed said headline inflation is expected to average between 2.5 per cent and three per cent in 2023.

"The risks to the inflation outlook remain highly subject to changes to domestic policy on subsidies and price controls, as well as global commodity prices and financial market developments," he said.

Moving forward, Abdul Rasheed said ​​despite the challenging global environment, the Malaysian economy is projected to expand by around four per cent in 2023 and four to five per cent in 2024.

He said the growth will continue to be driven by the expansion in domestic demand amid steady employment and income prospects, particularly in domestic-oriented sectors.

"This growth performance along with other favourable economic developments would provide support to the ringgit," he added.

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