In the first quarter, private consumption grew by 5.3 percent year-on-year, faster than a 4.9 percent growth in the previous quarter, supported by continued wage and employment growth. Public consumption expanded by 3.8 percent, accelerating from a 3.3 percent increase in the December, due to higher spending on emoluments. Gross fixed capital formation rose 0.1 percent, slowing sharply from a 2.8 percent expansion in the fourth quarter. Private investment advanced by 2.2 percent, following a 4.9 percent in the preceding quarter. The slowdown was mainly attributable to the cautious business sentiments and lower investments in the upstream mining sector. In contrast, public investment declined by 4.5 percent, after growing 0.4 percent in the December quarter, due to lower spending on fixed assets by the public corporations. Exports decreased by 0.5 percent, reversing from a 4.0 percent growth in the fourth quarter. Imports grew by 1.3 percent, as compared to a 4.0 percent rise in the previous three months.
On the production side, agriculture sector registered a contraction (-3.8 percent from +1.5 percent in the previous quarter), as as adverse weather conditions led to lower production of palm oil. In contrast, an expansion was seen in construction sector (+7.9 percent from +7.4 percent), services (+5.1 percent from +5.0 percent, supported by continued expansion in domestic demand) and manufacturing sector (+4.5 percent from + 5.0 percent expansion, supported by the continued expansion in both export- and domestic-oriented industries, although at a slower pace.) A rebound was seen in mining sector (+0.3 percent from -1.3 percent, driven by an improvement in production of natural gas).
Moving forward, Malaysia's GDP is expected to remain on a sustained growth path of 4–4.5 percent, despite the challenging economic environment globally and domestically. Domestic demand will continue to be the principal driver of growth, sustained primarily by private sector spending. However, domestic consumption is expected to grow at a moderate pace as households continue to adjust to the higher cost of living. Overall investment is also expected to grow at a slower pace but will remain supported by the implementation of infrastructure development projects and capital spending in the manufacturing and services sectors.
On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1.0 percent, slowing from a 1.5 percent expansion in the previous three months.