Malaysian economy posts double-digit growth for first time in a year in third quarter

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KUALA LUMPUR — Malaysia’s economy recorded double-digit growth for the first time in more than a year in the third quarter, boosted by rising domestic demand and strong exports, the central bank said Friday.

Gross domestic product (GDP) in July-September rose 14.2% from a year earlier, faster than the 11.7% growth forecast in a Reuters poll and up from the annual increase of 8.9% of the previous quarter.

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It is also the fastest pace of growth since the second quarter of 2021, when the economy grew by 16.1%.

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Bank Negara Malaysia (BNM) said the jump was due to a continued expansion in domestic demand, a firm recovery in the labor market, robust exports and continued policy support.

“Due to the healthy growth, the growth this year will exceed the 7 percent forecast earlier,” BNM Governor Nor Shamsiah Yunus told a news conference.

Malaysia’s economy has recovered strongly from a pandemic-induced slump, although risks of a global slowdown cloud the outlook.

The government last month revised its growth forecast for 2022 up to 6.5%-7.0% from 5.3%-6.3%, but it expects economic growth to slow to 4.0%-5.0% next year.

Headline inflation likely peaked at 4.5% in the third quarter and is expected to moderate thereafter, but will remain elevated, BNM said.

Inflation in Malaysia has been largely contained this year by record government subsidies and price controls, but upside risks remain, with the central bank issuing its fourth consecutive 25 basis point hike last week. .

Since May, BNM has raised rates by a total of 100 basis points from an all-time low of 1.75%, in an effort to temper inflation. (Reporting by Rozanna Latiff and Mei Mei Chu; Editing by Ana Nicolaci da Costa)


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