Malaysia posts surprise GDP growth

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Malaysia’s economy expanded at the fastest pace in more than two years in the second quarter of 2017 on the back of domestic demand and robust exports, defying expectations for a slight slowdown.

The strong performance is likely to add to speculation over whether Prime Minister Najib Razak will call an early election to take advantage of an economic recovery and a fractured opposition.

Southeast Asia’s third-largest economy grew 5.8 per cent in April-June from the same period a year earlier, data showed on August 18, well above a Reuters poll forecast of 5.4 per cent and faster than the 5.6 per cent expansion seen in the first quarter.

On the production side, the service sector logged 6.3 per cent expansion. Manufacturing climbed 6 per cent and the agriculture sector grew 5.9 per cent. The expenditure-side breakdown of GDP showed that private consumption advanced 7.1 per cent fueled by the spending on food and non-alcoholic beverages.

Following the data, Malaysia’s central bank raised its 2017 growth forecast to above 4.8 per cent. The last forecast in March predicted growth of 4.3 to 4.8 per cent.

Meanwhile, Fitch Ratings affirmed Malaysia’s A-credit rating with a stable outlook, citing its strong economic growth and the government’s ability to contain the impact of falling oil prices on its budget deficit.

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Malaysia's economy expanded at the fastest pace in more than two years in the second quarter of 2017 on the back of domestic demand and robust exports, defying expectations for a slight slowdown. The strong performance is likely to add to speculation over whether Prime Minister Najib Razak will call an early election to take advantage of an economic recovery and a fractured opposition. Southeast Asia's third-largest economy grew 5.8 per cent in April-June from the same period a year earlier, data showed on August 18, well above a Reuters poll forecast of 5.4 per cent and faster than the...

Reading Time: 1 minute

Malaysia’s economy expanded at the fastest pace in more than two years in the second quarter of 2017 on the back of domestic demand and robust exports, defying expectations for a slight slowdown.

The strong performance is likely to add to speculation over whether Prime Minister Najib Razak will call an early election to take advantage of an economic recovery and a fractured opposition.

Southeast Asia’s third-largest economy grew 5.8 per cent in April-June from the same period a year earlier, data showed on August 18, well above a Reuters poll forecast of 5.4 per cent and faster than the 5.6 per cent expansion seen in the first quarter.

On the production side, the service sector logged 6.3 per cent expansion. Manufacturing climbed 6 per cent and the agriculture sector grew 5.9 per cent. The expenditure-side breakdown of GDP showed that private consumption advanced 7.1 per cent fueled by the spending on food and non-alcoholic beverages.

Following the data, Malaysia’s central bank raised its 2017 growth forecast to above 4.8 per cent. The last forecast in March predicted growth of 4.3 to 4.8 per cent.

Meanwhile, Fitch Ratings affirmed Malaysia’s A-credit rating with a stable outlook, citing its strong economic growth and the government’s ability to contain the impact of falling oil prices on its budget deficit.

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