Malaysia's economic growth moderated slightly in the first quarter as weaker exports neutralized the improvement in spending and investment, data published by the Department of Statistics showed Friday.
Gross domestic product grew 5.6 percent year-over-year in the first quarter, slightly slower than last quarter's revised 5.7 percent expansion. Nonetheless, the annual growth was faster than the 5.5 percent growth expected by economists.
Quarter-on-quarter, GDP expanded 1.2 percent but slower than the 1.8 percent growth seen in the fourth quarter.
The slowdown in the first quarter would have been sharper were it not for consumers bringing forward spending ahead of the implementation of a Goods & Services Tax (GST) in April, Krystal Tan, an Asia economist at Capital Economics said.
The growth is likely to be much weaker in the second quarter, once this support becomes a drag, she said.
The World Bank forecast Malaysia's growth to ease to 4.7 percent this year before rising to 5 percent in 2016 as the lender expects government revenue to remain subdued due to a fall in global oil prices.
However, the central bank said last week the prospects are for the economy to remain on a steady growth path, with domestic demand remaining as the key growth driver.
Although private spending is set to moderate due to the introduction of the GST, the bank said consumption would be underpinned by the steady rise in incomes as well as employment.
On the production side of GDP, the service sector logged steady annual growth of 6.4 percent. Manufacturing growth rose to 5.6 percent from 5.4 percent.
At the same time, mining and quarrying registered a strong 9.6 percent expansion, primarily reflecting a double-digit increase in crude oil output.
On the expenditure-side, private spending growth quickened to 8.8 percent from 7.6 percent. Similarly, the increase in investment rose notably to 7.9 percent from 4.3 percent.
In contrast, exports fell 0.6 percent due to the sluggish performance of services exports and a moderation in exports of goods. Imports grew at a slower pace of 1 percent following a moderation in both imports of goods and services.
Another report from the statistical office showed that the current account surplus surged to MYR 10 billion in the first quarter from MYR 5.7 billion in the fourth quarter. The increase in current account surplus reflected lower deficit in both primary income and services account.
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