Malaysia’s economic growth continued to slow in the second quarter, trundling along at its weakest pace in nearly seven years as poor global demand for commodities continued to hurt the trading nation.
Southeast Asia’s third-largest economy grew 4% in the second quarter from a year earlier, official data showed, in line with a median forecast in a Reuters poll but lower than 4.2% in the January-to-March period. It is the fifth straight quarter of declining growth and the slowest since the third quarter of 2009, when the economy contracted 1.2%.
Like Singapore a day earlier, Malaysia’s central bank warned that uncertainties in the global economy could weigh on the country’s growth in the second half of this year. In January, the government revised its 2016 growth projection to 4 to 4.5% from the initial 4 to 5%, on expectations of a sustained slump in global crude oil prices.
Bank Negara Governor Muhammad Ibrahim said: “To date our economy remains resilient, driven by domestic demand, and is on track to grow within the projected 4 to 4.5% amid a challenging global environment.”
Second-quarter growth was propped up by the expansion in domestic demand, and private investment grew 5.6% from a year earlier against 2.2% in the previous quarter.
Private consumption grew by an annual 6.3% versus 5.3% in the first quarter, supported by continued wage and employment growth as well as increases in disposable income.
The current account surplus narrowed to RM1.9 billion ($471 million) in the second quarter down from RM5 billion in the first quarter, due to a smaller trade surplus and higher net income payments, said the central bank.
