Malaysia 2Q23 GDP - 21 August 2023

Growth moderated considerably on weaker private spending, net exports, and a high-base effect

The GDP growth rate moderated in 2Q23 (2.9% YoY; 1Q23: 5.6%), registering below house forecast and market expectations (KIBB: 6.0%; Consensus: 3.3%)

  • The slower-than-expected growth can be primarily attributed to weaker private sector expenditure and lower net exports, exacerbated by a global economic slowdown and weaker commodity prices. On the supply side, growth slowed across all sectors, particularly dragged by the Services and Manufacturing sectors, but retained some support from stable labour market conditions and higher tourism activity. That said, the weaker YoY growth is partly attributable to a high base effect from 2Q22.
  • Shifting from the robust expansion seen in 1Q23, Malaysia is currently among the slowest growing economies in the ASEAN-5 (ex-TH + VN) group.
  • Seasonally adjusted QoQ (1.5%; 1Q23: 0.9%): charted an expansion due to a notable increase in private final consumption expenditure (5.9%; 1Q23: 2.0%), as well as a rebound in government final consumption expenditure (4.0%; 1Q23: -1.7%) and gross fixed capital formation (4.7%; 1Q23: -1.4%).

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