KUALA LUMPUR (BLOOMBERG) - Malaysia's economic growth slowed in the first quarter, dragged down by weaker trade and investment in the export-reliant nation.
Gross domestic product expanded 4.5 per cent from a year ago, down from 4.7 per cent in the fourth quarter, the central bank said in Kuala Lumpur on Thursday (May 16). The median estimate in a Bloomberg survey of 22 economists was for growth of 4.3 per cent.
Growth in domestic demand weakened to 4.4 per cent in the first quarter from 5.7 per cent in the previous three months, on the back of a slump in private and public-sector investment. The central bank said consumer spending will likely moderate but remain firm.
A rebound in agriculture and solid growth in services helped to underpin the economy's expansion.
Exports contracted in February and March, resulting in quarterly growth of 0.1 per cent. For trade-reliant Malaysia, the renewed tariff tensions between the US and China poses a serious threat to the economy.
The central bank, which cut interest rates last week, is forecasting growth of 4.3 per cent to 4.8 per cent this year, compared with the government's projection of 4.9 per cent.
Growth risks remain tilted to the downside due to global factors, the bank said on Thursday.
Prime Minister Mahathir Mohamad recently revived billion-dollar infrastructure projects that were put on hold in 2018 - such as the US$11 billion East Coast Rail Link and the US$34 billion Bandar Malaysia property and transport hub - which could start translating to stronger growth in the second half, according to Bank Islam Malaysia Bhd.