(Bloomberg) -- Malaysia’s economic growth quickened in the second quarter, spurred by stronger domestic demand and a rebound in commodity prices.
Gross domestic product expanded 4.9% in the second quarter from a year ago, up from 4.5% in the previous quarter. That beat the median estimate of 4.7% in a Bloomberg survey of 22 economists and was the strongest expansion since early last year.
Bank Negara Malaysia Governor Nor Shamsiah Mohd Yunus said the central bank expects full-year GDP growth of 4.3%-4.8%, affirming the previous estimate.
Malaysia’s strong showing bucks the trend across the region, where the U.S.-China trade war has taken a toll on economies that rely on trade for their momentum. Earlier this week neighboring Singapore cut its full-year growth forecast almost to zero, and Thailand is expected to roll out a stimulus package later Friday. Goldman Sachs Group Inc (NYSE:GS). analysts on Thursday downgraded their forecasts for Asia’s four "Tiger" economies, given the trade tensions.
Key Insights
- Malaysia’s economy grew 1.0% on a seasonally adjusted quarterly basis, slightly above the 0.9% estimate.
- Private consumption “remained as the main anchor to the economy,” with growth of 7.8%, chief statistician Mohd Uzir Mahidin said in a release.
- All sectors of the economy expanded in the quarter, with net exports growing 22.9% and services and manufacturing up 6.1% and 4.3%, respectively
- The current-account surplus stood at 14.3 billion ringgit in the second quarter, down slightly from 16.4 billion ringgit in the first quarter but far above the 6.8 billion ringgit estimate.
- Loan growth surged to 6.3% in June, driven by demand for personal-use items and property purchases, which pointed to robust domestic consumption, MIDF senior analyst Imran Yassin Md Yusof said
- The central bank announced further steps to improve market liquidity ahead of a review by FTSE Russell, which will decide in September whether to keep ringgit bonds in its index
- Finance Minister Lim Guan Eng is planning a “contingency package” in the 2020 budget to insulate the country from the trade war’s impact. Malaysia’s trade shrank in June as shipments to China, its second-largest export destination, slid 12% from a year ago.
- Mining output increased 3.3% in the second quarter after six consecutive quarters of contraction, helping industrial production rise to near 4% in the three months through June.