Malaysia's economic growth slowed in the third quarter on weak investment and exports, data from the Department of Statistics showed Friday.
Gross domestic product climbed 4.4 percent on a yearly basis, as expected, following second quarter's 4.9 percent expansion. A similar slower growth was last reported in the third quarter of 2018.
On a quarterly basis, the economy expanded 0.9 percent, slower than the 1 percent growth seen in the second quarter.
Nonetheless, the central bank said growth is expected to be within projections in 2019 and the pace sustained going into 2020. The bank forecast 4.3-4.8 percent growth this year.
Alex Holmes, an economist at Capital Economics, said growth is likely to weaken further in the coming quarters.
On the plus side, recent monetary policy loosening should provide a boost to the economy. Tighter fiscal policy is a key headwind as the government aims to bring down the budget deficit, the economist noted.
Last week, the central bank unexpectedly reduced the statutory reserve requirement ratio by 50 basis points to 3.00 percent. In May, the bank had lowered its benchmark interest rate by a quarter point citing risks to economic outlook.
The production-side breakdown of GDP showed that services and manufacturing sectors remained as the anchor to the economy. The service sector logged 5.9 percent growth and manufacturing advanced 3.6 percent. Agriculture output was up 3.7 percent.
Meanwhile, construction shrank 1.5 percent and mining and quarrying by 4.3 percent.
On the expenditure-side, household consumption grew 7 percent impelled by food and non-alcoholic beverages spending. At the same time, government spending climbed 1 percent.
Meanwhile, gross fixed capital formation remained negative for the third consecutive quarters. Investment was down 3.7 percent.
Exports were down 1.4 percent and imports decreased 3.3 percent in the third quarter.
Further, data showed that the current account logged a surplus of MYR 11.5 billion compared to a MYR 14.3 billion surplus in the previous quarter.
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