In the December quarter, private consumption grew by 6.2 percent year-on-year, slower than a 6.4 percent rise in the previous quarter, supported by continued wage and employment growth. Public consumption contracted by 4.2 percent, compared to a 2.2 percent growth in the third quarter, due to rationalisation of spending on supplies and services and a moderation in growth of spending on emoluments. Gross fixed capital formation rose 2.4 percent, faster than a 2.0 percent expansion in the preceding quarter. Private investment advanced by 4.9 percent, following a 4.7 percent rise in the third quarter, supported by continued capital spending in the services and manufacturing sectors. Meanwhile, public investment remained in contraction, following a 3.8 percent decline in the prior quarter. Exports rose 1.3 percent, rebounding from a 1.3 percent decline in the September quarter. Imports also went up 0.7 percent, compared to a 2.3 percent fall in the previous three months.
On the production side, services sector grew the most by 5.5 percent (from 6.1 percent in the preceding three months, supported primarily by consumption-related services), followed by construction (5.1 percent from 7.9 percent, largely driven by the civil engineering sub-sector), mining (4.9 percent from 3.0 percent, due to an increase of natural gas output) and manufacturing (4.8 percent from 4.2 percent, supported by higher growth in both domestic and export-oriented industries). In contrast, the agriculture sector shrank 2.4 percent, slowing from a 6.1 percent contraction in the September quarter, due to diminishing impact of El Nino on crude palm oil yields.
Moving forward, the external environment may continue to remain challenging while the Malaysian economy will experience sustained growth with the primary driver being domestic demand. Private consumption is anticipated to remain supported by wage and employment growth, with additional impetus coming from announced Government measures to support disposable income of households. Investment activity will continue to be anchored by the on-going implementation of infrastructure projects and capital spending in the manufacturing and services sectors.
Considering full 2016, the economy advanced 4.2 percent, compared to a 5.0 percent expansion in 2015.