Malaysia 3Q23 GDP - 20 November 2023

Better-than-expected growth driven by robust domestic demand

The GDP growth expanded in 3Q23 (3.3% YoY; 2Q23: 2.9%), surpassing house forecast and market expectations (KIBB: 1.7%; Bloomberg consensus: 3.2%)

• Growth was mainly attributed to the expansion in domestic spending and increased activity in services and construction, partially offsetting contractions in the mining and manufacturing sectors. This exceeds our expectation, as we anticipated that the manufacturing downturn and a higher base effect recorded last year (3Q22: 14.1%) would have a more significant negative impact on the overall growth for the quarter.
• Nevertheless, Malaysia is currently the fourth fastest- growing economy in the ASEAN-5 (ex-TH +VN) group, behind the Philippines (5.9%), Vietnam (5.3%) and Indonesia (4.9%).
• Meanwhile, seasonally adjusted QoQ (2.6%; 2Q23: 1.5%) registered an expansion due to an increase in government final consumption expenditure (4.6%; 2Q23: 4.0%), which partially mitigated the marginal contraction in private final consumption expenditure (- 0.7%; 2Q23: 5.9%). This was also driven by a rebound in agriculture (4.5%; 2Q23: -3.5%) and mining and quarrying (8.6%; 2Q23: -2.7%) as well as expansion in the manufacturing (1.5%; 2Q23: 0.6%) sectors.