Malaysia’s Economy Grew At 5.6% On Domestic Demand, Labour Recovery: DOSM

Kuala Lumpur, Malaysia city skyline.

Malaysia’s Gross Domestic Product (GDP) in the first quarter of 2023 expanded 5.6 per cent after recorded a growth of 7.1 per cent in the previous quarter. In terms of quarter-on-quarter seasonally adjusted, GDP grew marginally by 0.9 per cent (Q4 2022: -1.7%) in this quarter.

The Department of Statistics Malaysia (DOSM) in today’s (May 12) release of Gross Domestic Product (GDP) for the First Quarter of 2023 cited that correspondingly, the monthly economic performance has grown modestly in the first quarter with a growth of 4.6 per cent in January, followed by 6.6 per cent in February and 5.6 per cent in March 2023.

Chief Statistician Malaysia Dato’ Sri Dr. Mohd Uzir Mahidin, said: “The economic performance in the first quarter of 2023 on the supply side was driven by all sectors, particularly the Services, Manufacturing and Construction sectors. On the demand side, Private final consumption expenditure and Gross fixed capital formation continued to propel the growth in the economy this quarter”.

“In terms of sectoral performance, the Services sector was the main impetus of Malaysia’s economy, rose by 7.3 per cent (Q4 2022: 9.1%) in the first quarter of 2023. The favourable performance was attributed to the Wholesale & retail trade (9.4%), Transportation & storage (17.0%), Business services (16.2%) and Food & Beverage and accommodation (12.0%) sub-sectors.

“The strong growth in Business services was attributed to travel agencies and related tourism activities, following an increase in tourist arrivals. On a quarter-on-quarter seasonally adjusted, the Services sector increased 1.7 per cent (Q4 2022: -1.5%)”.

The Manufacturing sector grew moderately by 3.2 per cent (Q4 2022: 3.9%) in the first quarter of 2023 led by Electrical, electronic & optical products (3.8%) followed by Transport equipment, other manufacturing and repair (7.7%) and Vegetable & animal oils & fats and food processing products (7.2%).


On the contrary, Wood, furniture, paper & paper products and printing recorded a decrease of 4.0 per cent (Q4 2022: -2.6%).

On a quarter-on-quarter seasonally adjusted, the overall Manufacturing sector increased 0.5 per cent (Q4 2022: -2.6%). The Construction sector expanded 7.4 per cent (Q4 2022: 10.1%) in the first quarter of 2023. The performance in this sector was contributed by positive growth in Civil engineering (15.9%), Specialised construction activities (8.7%) and Non-residential buildings (6.4%). Nonetheless, Residential building decreased 3.4 per cent (Q4 2022: 2.8%). On a quarter-on-quarter seasonally adjusted, the Construction sector increased 2.9 per cent (Q4 2022: -4.1%).

The Mining & quarrying sector rose 2.4 per cent (Q4 2022: 6.3%) supported by all activities, mainly the Crude oil & condensate sub-sector which increased 4.0 per cent (Q4 2022: 4.3%) in this quarter. Meanwhile, Natural gas grew at a slower pace of 0.6 per cent (Q4 2022: 7.3%). In terms of seasonally adjusted, this sector dropped 3.2 per cent (Q4 2022: -2.4%). In addition, the Agriculture sector grew marginally at 0.9 per cent (Q4 2022: 1.1%) in this quarter, induced by a better performance in the Oil palm (3.4%) and Other agriculture (2.6%) sub-sectors.

The Agriculture sector recorded a decrease of 2.5 per cent (Q4 2022: 2.0%) on seasonally adjusted terms.

Mohd Uzir added: “Private final consumption or household expenditure, which contributed 61.5 per cent to GDP, grew 5.9 per cent (Q4 2022: 7.3%) attributed to the higher consumption in Transport (11.2%), followed by Housing, water, electricity, gas & other fuels (8.9%) and Food & non-alcoholic beverages (3.4%) in the first quarter of 2023.

“On a seasonally adjusted quarter-on-quarter terms, the overall performance of Private final consumption expenditure posted an increase of 2.0 per cent (Q4 2022: -2.6%)”.

Gross fixed capital formation (GFCF) or investment in fixed assets increased by 4.9 per cent (Q4 2022: 8.8%) in this quarter. The performance of GFCF was contributed by Structure (7.5%) and Machinery & equipment (2.6%), whereas Other assets contracted 0.3 per cent. Based on GFCF by sector, both Public and Private sectors recorded an increase in the first quarter of 2023. On a quarter-on-quarter seasonally adjusted, the GFCF registered a decrease of 1.4 per cent (Q4 2022: 0.1%).

Government final consumption expenditure declined by 2.2 per cent (Q4 2022: 3.0%) influenced by slower growth in spending on supplies and services. On a quarter-on-quarter seasonally adjusted, Government final consumption expenditure decreased 1.7 per cent (Q4 2022: -1.0%) in this quarter.

He also mentioned that “Net exports remained positive at 54.4 per cent as compared to 23.0 per cent in the fourth quarter of 2022. This momentum was influenced by a drop of 6.5 per cent (Q4 2022: 7.2%) in Imports, as compared to Exports which shrank 3.3 per cent (Q4 2022: 8.6%). This performance was attributed to the decline in both exports and imports of goods.”

Globally, the world economy continues to experience greater uncertainty weighed down by inflation. In the ASEAN region, GDP grew at slower rate particularly in Viet Nam and Philippines which grew at 3.3 per cent (Q4 2022: 5.9%) and 6.4 per cent (Q4 2022: 7.1%) respectively. In addition, based on advance estimates Singapore’s economy, grew marginally by 0.1 per cent (Q4 2022: 2.1%) in this quarter. Meanwhile, Indonesia’s GDP remained at 5.0 per cent.

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