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Malaysia
AsiaSoutheast Asia

Malaysia posts stronger Q2 GDP growth, beating neighbours hit by US-China trade war

  • Malaysia became the first Southeast Asian country to report an acceleration in growth from the previous quarter, as its economy grew by 4.9 per cent in April-June
  • This comes as Indonesia, the Philippines and Singapore reported weaker growth as exports slowed down

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The Petronas Twin Towers in Kuala Lumpur, Malaysia. Photo: Reuters
Reuters
Malaysia’s economy grew faster than expected in April-June and became the first Southeast Asian nation to report an acceleration in growth from the previous quarter, driven by stronger consumer spending and palm oil production.

Central bank data on Friday showed second quarter gross domestic product grew 4.9 per cent year-on-year, beating the 4.8 per cent forecast in a Reuters poll, and faster than the 4.5 per cent pace in the first quarter.

Malaysia’s pickup in growth contrasts with other Southeast Asian economies, which have slowed this year as the US-China trade war hits demand for exports. However, analysts and policymakers caution that increased global risks pose challenges for Malaysia’s outlook.

“Clear downside risks remain on the immediate horizon, stemming primarily from external factors,” Bank Negara Malaysia Governor Nur Shamsiah Mohd Yunus said.

Malaysia’s full-year growth is still expected to come in within the central bank’s 4.3-4.8 per cent target range, but Nur Shamsiah said an escalation in global trade tensions could knock 0.1 percentage point off GDP growth.

Indonesia, the Philippines and Singapore have all reported weaker growth in the second quarter than in the first. Thailand will report April-June data on Monday.

Malaysia’s central bank cut interest rates in May to pre-empt flagging global demand tied to the trade dispute between the United States and China, which remains a key concern for the trade-reliant economy.

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