UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting comment on the release of GDP figures in Malaysia.

Key Takeaways

“Malaysia’s economy surprised on the upside in 3Q22 with real GDP growth accelerating further to 14.2% y/y last quarter (from +8.9% in 2Q22). It was the strongest gain since 2Q21, beating our estimate (+13.6%) and Bloomberg consensus (+12.5%). On a seasonally adjusted basis, real GDP grew by 1.9% q/q (2Q22: +3.5% y/y).”

“The outperformance of 3Q22 GDP was credited to favourable base effects, the ongoing transition to endemicity since Apr this year, continued government subsidies, higher national monthly minimum wages and strong global demand for Malaysia’s electrical & electronics (E&E) products. This led to a robust improvement in both domestic and external demand amid modest stock replenishment activities last quarter. All economic sectors also logged respectable growth, led by services, manufacturing and construction sectors.”

“We revise our 2022 full-year real GDP growth estimate up to 8.3% (from 6.5% previously) after taking into account a much stronger-than-initially-expected economic expansion of 9.3% in the first nine months of 2022 and a projected normalization to 5.5% growth in 4Q22. For 2023, we maintain a moderate real GDP growth projection at 4.0% (official est: 4.0%-5.0%) given a confluence of more challenging external factors.”