Malaysia 4Q23 GDP - 19 February 2024

Growth slows in 4Q23 on weak global demand; overall 2023 growth moderated

The GDP growth surprisingly slowed in the final quarter of 2023 (3.0% YoY; 3Q23: 3.3%), lower than house forecast and market expectations (KIBB: 3.7%; Bloomberg consensus: 3.4%) and even below DOSM advance GDP estimates of 3.4%

  • Slower growth is attributed to the ongoing weakness in the manufacturing sector, which saw a second consecutive quarter of contraction. This is partly due to a prolonged slump in the export-oriented sector, amid weak global demand. Additionally, the momentum was restrained by modest growth in services and construction sectors. However, domestic demand stayed robust and continues to support overall growth.
  • Meanwhile, seasonally adjusted QoQ contracted (2.1%; 3Q23: 2.6%), the lowest since 3Q21 (-2.7%), due to weak private final consumption expenditure (3.0%; 3Q23: -0.7%), followed by a moderate growth in government final consumption expenditure (0.6%; 3Q23: 4.6%) and gross fixed capital formation (0.3%; 3Q23: 1.8%). This was also attributable to weak construction (-7.3%; 3Q23: 3.7%), followed by manufacturing (-2.9%; 3Q23: 1.5%) and services (2.4%; 3Q23: 2.1%) sectors.
  • Malaysia is currently ranked fourth in the ASEAN-5 (ex-TH +VN) group for 4Q23 GDP performance, behind Vietnam (6.7%), the Philippines (5.6%) and Indonesia (5.0%). Overall, the Philippines recorded the fastest GDP growth in 2023 (5.6%), followed by Indonesia (5.0%), Vietnam (5.0%), Malaysia (3.7%) and Singapore (1.1%).

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