Malaysia's gross domestic product (GDP) expanded by 5.3% on year in the third quarter, reflecting a modest slowdown from the 5.8% growth recorded in the second quarter, as reported by the Department of Statistics Malaysia (DOSM). This indicates the ongoing resilience of the country’s economy despite global economic uncertainties. In the third period alone, the nation's economy grew by 4.6% from the second quarter, revealing a robust expansion within a short time frame.
Over the first nine months of the year, Malaysia's GDP has averaged a growth rate of 5.1% compared to the same time last year, showcasing a continuous upward trend. Specific sectors demonstrate varying performance, with the construction sector standing out with a remarkable expansion of 19.5% on a year-on-year basis in the third quarter.
This growth illustrates the increasing investment and ongoing projects driving the sector forward, despite global economic challenges. The manufacturing sector followed with a growth of 5.7%, and the services sector also saw a positive increase of 5.1%. However, the agricultural sector grew by a more modest 4%, and the mining sector faced challenges, declining by 3.4%. In a prepared statement, Malaysia's chief statistician expressed optimism for continued economic expansion.
Factors contributing to this forecast include a stable labor market, moderate inflationary pressures, and supportive fiscal and monetary policies. The revival of tourism activities is bolstering the expansionary momentum of the domestic economy, which is critical for Malaysia's recovery. Moreover, rising consumer spending coupled with increasing investments is anticipated to influence strong economic growth in the fourth quarter.
Furthermore, Malaysia's international trade is also displaying positive trends, reinforcing the optimistic outlook for the economic landscape. Contrasting with these optimistic figures, the recent purchasing managers index (PMI) report from S&P Global presents a slightly different narrative. The seasonally adjusted manufacturing PMI for Malaysia recorded a decline to 49.5 in September from 49.7 in August, dipping below the critical 50-mark that signifies the difference between growth and contraction in the manufacturing sector.
This decline reflects a marginal softening in the health of the sector, bringing a note of caution amidst the overall economic expansion. The adaptation and response of Malaysia's manufacturing sector to these changes will be vital in maintaining its growth trajectory moving forward. It is important to note that S&P Global does not produce a services PMI for Malaysia, contrasting it with trends observed in other nations, which further complicates the economic outlook. As Malaysia navigates these economic challenges and opportunities, stakeholders will be keenly observing upcoming data and trends in both domestic and international markets..