By Ambar Warrick
Investing.com-- Malaysia's economy surged in the second quarter of 2022 as resilience in its services sector helped offset headwinds from high commodity prices and a global economic slowdown.
Economic growth in the three months to June 30 rose 8.9%, far more than the 6.7% expected by analysts. The country’s economy had expanded by 5% in the first quarter, after a 3.1% rise in 2021.
Friday’s figures rank Malaysia among the fastest growing Southeast Asian economies in the second quarter. A shock rise in commodity prices earlier this year, stemming from the Russia-Ukraine conflict, had largely undermined economic growth across most of the region.
Malaysia’s vast service sector remained the main factor behind its expansion, the Department of Statistics said in a release.
Growth in manufacturing, particularly in the electrical components and electronics sectors also underpinned exports, which contributed largely to economic growth. The country's top export destinations are China, Singapore, and the United States.
Lower base effects- an aftermath of the COVID-19 pandemic- also drove the substantially higher growth figure.
Private consumption remained upbeat through the quarter, with expenditure up 18.3% from last year.
Malaysian stocks responded positively to the data, rising 0.2%. The ringgit rose 0.1%.
The Malaysian government is targeting annual economic growth of 5.5% to 6.5%, amid easing inflationary pressures and an improvement in economic growth.
Malaysia’s central bank has hiked rates twice so far this year, following a rise in inflation. But the bank flagged a somewhat measured pace to raising rates, keeping them much lower than other countries in Asia.
The Southeast Asian country’s economy had slowed sharply in 2020 due to the COVID-19 pandemic, before rebounding somewhat in 2021.
Economic growth has been steadily trending higher since the government eased COVID-related restrictions last year.