MARKET DEVELOPMENT
Malaysia Saw Six Per Cent Growth in 2014
Malaysia Saw Six Per Cent Growth in 2014
13/02/2015 (Borneo Post) - The Malaysian economy registered a higher growth of 5.8 per cent in the fourth quarter of 2014 (4Q14) compared with 5.6 per cent in 3Q14.
Bank Negara Malaysia (BNM) in a statement yesterday said the stronger growth was driven by private sector spending as domestic demand remained the anchor of growth in the fourth quarter, mainly on account of improvement in private sector activity.
“Private investment expanded at a faster pace of 11.2 per cent in 4Q14 compared to 6.8 per cent in 3Q14, driven by capital spending in the manufacturing and services sectors.
“Private consumption registered a stronger growth of 7.8 per cent in 4Q14 against 6.7 per cent in 3Q14 supported by stable labour market conditions and continued wage growth,” BNM said.
Nonetheless, BNM noted public consumption expanded at a more moderate pace of 2.7 per cent in the fourth quarter compared to 5.3 per cent in 3Q14 due to slower growth in both emoluments and supplies and services.
It added public investment, however, continued to decline, albeit at a slower pace of 2.1 per cent in the fourth quarter against a bigger contraction of 8.9 per cent in 3Q14 following a smaller contraction in spending on fixed assets by the federal government.
On a quarter-on-quarter (q-o-q) seasonally adjusted basis, the central bank said the growth momentum increased to two per cent in 4Q14 from 0.9 per cent in 3Q14.
For the whole of 2014, BNM said the country’s economy grew by six per cent.
Meanwhile, on the supply side of the economy, the central bank noted growth was sustained by major economic sectors, supported by trade and domestic activities.
The central bank revealed that growth in the services sector was underpinned by expansion across all sub-sectors.
“The construction sector remained strong, driven mainly by non-residential and residential sub-sectors, while the mining sector registered a stronger growth due to higher crude oil production.
“The manufacturing sector continued to expand, supported mainly by the export-oriented industries.
“However, the agriculture sector recorded a contraction due to lower palm oil production caused by the floods in the eastern states of Peninsular Malaysia,” the central bank said.
On another note, BNM said the inflation rate, as measured by the annual change in the Consumer Price Index (CPI), averaged lower at 2.8 per cent in the fourth quarter compared to three per cent in 3Q14.
The central bank explained that the decline was mainly attributed to lower inflation in the food and non-alcoholic beverages category (2.7 per cent) against 3.2 per cent in 3Q14, which reflected the decline in the prices of fresh meat and fresh seafood during the quarter.
For the whole of 2014, the central bank said the inflation rate averaged 3.2 per cent compared with 2.1 per cent in 2013.
As for the foreign exchange market, BNM said the movement of the ringgit and other regional currencies in the fourth quarter were driven by external developments.
The central bank said overall, the ringgit depreciated by 6.4 per cent against the US dollar during 4Q14.
It added the ringgit also depreciated against the Australian dollar (-0.1 per cent), the pound sterling (-2.2 per cent), the euro (-2.3 per cent), and all regional currencies over the same period.
Nonetheless, BNM observed that the ringgit appreciated by 2.3 per cent against the Japanese yen.
Moreover, the central bank said between January 1 and February 10 this year, the ringgit depreciated against the US dollar by 2.4 per cent.
BNM noted the ringgit also depreciated against the pound sterling (-0.3 per cent) and Japanese yen (-3.2 per cent), but appreciated against the euro (4.7 per cent) and Australian dollar (2.2 per cent).
Against regional currencies, BNM said the ringgit broadly depreciated by between 0.1 per cent and 3.3 per cent.
“Besides growing concerns on the prospects of global growth, regional currencies also faced depreciation pressure due to the strengthening of the US dollar, which was driven by the expectations of interest rate normalisation by the Fed amid the recovery in the US economy.
“The ringgit, however, depreciated more than other regional currencies, especially in December, following heightened market concerns on the impact of the sharp fall in oil prices on the Malaysian economy, particularly on the government fiscal position,” BNM said.
Bank Negara Malaysia (BNM) in a statement yesterday said the stronger growth was driven by private sector spending as domestic demand remained the anchor of growth in the fourth quarter, mainly on account of improvement in private sector activity.
“Private investment expanded at a faster pace of 11.2 per cent in 4Q14 compared to 6.8 per cent in 3Q14, driven by capital spending in the manufacturing and services sectors.
“Private consumption registered a stronger growth of 7.8 per cent in 4Q14 against 6.7 per cent in 3Q14 supported by stable labour market conditions and continued wage growth,” BNM said.
Nonetheless, BNM noted public consumption expanded at a more moderate pace of 2.7 per cent in the fourth quarter compared to 5.3 per cent in 3Q14 due to slower growth in both emoluments and supplies and services.
It added public investment, however, continued to decline, albeit at a slower pace of 2.1 per cent in the fourth quarter against a bigger contraction of 8.9 per cent in 3Q14 following a smaller contraction in spending on fixed assets by the federal government.
On a quarter-on-quarter (q-o-q) seasonally adjusted basis, the central bank said the growth momentum increased to two per cent in 4Q14 from 0.9 per cent in 3Q14.
For the whole of 2014, BNM said the country’s economy grew by six per cent.
Meanwhile, on the supply side of the economy, the central bank noted growth was sustained by major economic sectors, supported by trade and domestic activities.
The central bank revealed that growth in the services sector was underpinned by expansion across all sub-sectors.
“The construction sector remained strong, driven mainly by non-residential and residential sub-sectors, while the mining sector registered a stronger growth due to higher crude oil production.
“The manufacturing sector continued to expand, supported mainly by the export-oriented industries.
“However, the agriculture sector recorded a contraction due to lower palm oil production caused by the floods in the eastern states of Peninsular Malaysia,” the central bank said.
On another note, BNM said the inflation rate, as measured by the annual change in the Consumer Price Index (CPI), averaged lower at 2.8 per cent in the fourth quarter compared to three per cent in 3Q14.
The central bank explained that the decline was mainly attributed to lower inflation in the food and non-alcoholic beverages category (2.7 per cent) against 3.2 per cent in 3Q14, which reflected the decline in the prices of fresh meat and fresh seafood during the quarter.
For the whole of 2014, the central bank said the inflation rate averaged 3.2 per cent compared with 2.1 per cent in 2013.
As for the foreign exchange market, BNM said the movement of the ringgit and other regional currencies in the fourth quarter were driven by external developments.
The central bank said overall, the ringgit depreciated by 6.4 per cent against the US dollar during 4Q14.
It added the ringgit also depreciated against the Australian dollar (-0.1 per cent), the pound sterling (-2.2 per cent), the euro (-2.3 per cent), and all regional currencies over the same period.
Nonetheless, BNM observed that the ringgit appreciated by 2.3 per cent against the Japanese yen.
Moreover, the central bank said between January 1 and February 10 this year, the ringgit depreciated against the US dollar by 2.4 per cent.
BNM noted the ringgit also depreciated against the pound sterling (-0.3 per cent) and Japanese yen (-3.2 per cent), but appreciated against the euro (4.7 per cent) and Australian dollar (2.2 per cent).
Against regional currencies, BNM said the ringgit broadly depreciated by between 0.1 per cent and 3.3 per cent.
“Besides growing concerns on the prospects of global growth, regional currencies also faced depreciation pressure due to the strengthening of the US dollar, which was driven by the expectations of interest rate normalisation by the Fed amid the recovery in the US economy.
“The ringgit, however, depreciated more than other regional currencies, especially in December, following heightened market concerns on the impact of the sharp fall in oil prices on the Malaysian economy, particularly on the government fiscal position,” BNM said.