(Bloomberg) -- Malaysia’s economy expanded faster than expected in the third quarter on gains in the services and manufacturing sectors, putting the Southeast Asian nation on track to meet the government’s revised annual growth forecast.
Gross domestic product grew 5.3% in the July-September period from a year ago, according to advance estimates from the Malaysia’s Department of Statistics on Monday. That’s higher than the 5.1% median prediction in a Bloomberg survey.
The growth print comes just days after Prime Minister Anwar Ibrahim raised Malaysia’s 2024 growth forecast range to 4.8% to 5.3% amid expectations of a stronger recovery. That’s set to help the government meet its fiscal deficit target of 4.3% of GDP despite pushing a plan to cut petrol subsidies to next year.
Going forward, Malaysia’s government expects the economy to grow by about 4.5% to 5.5% next year, largely exceeding the 4.6% expansion predicted by analysts surveyed by Bloomberg. Higher salaries for civil servants, as well as plans to increase the minimum wage in the private sector, are poised to boost domestic demand in 2025.
Still, the trade-reliant ration remains vulnerable to global volatility. China’s uneven recovery has weighed on Malaysia’s exports, which contracted in September amid a decline in outbound shipments to the world’s second biggest economy.
--With assistance from Shinjini Datta.
©2024 Bloomberg L.P.