ANNUALREPORT 2013
27
INDUSTRYOUTLOOKANDFUTUREPROSPECTSOFOURGROUP
I.
Overviewof theMalaysian economy
TheMalaysianeconomyexpandedby4.1% in thefirstquarterof2013 (4Q2012:6.5%), supported
bystrongerdomesticdemand thatexpandedby8.2%during thequarter (4Q2012: 7.8%).Private
consumption registeredstronggrowthduring thequarter,while theexpansion ingrossfixedcapital
formationcontinued tobefirm, reflectingsustainedcapital spendingbyboth theprivateandpublic
sectors. Exports contractedmarginally during thequarter, andwithhigher growthof imports, led
toa larger negativecontributionof net exports togrowth.On thesupplyside,while thedomestic-
oriented industriescontinued to register sustainedgrowth, activity in themajor economicsectors
wasweighed down by theweak external conditions.
Domesticdemand registeredastronggrowthof 8.2% in thefirst quarter (4Q2012: 7.8%).Growth
wasdrivenbyhigher private consumption, whilegross fixed capital formation remained firmwith
adouble-digit growth rate.
Privateconsumptiongrewstrongly in thefirst quarter (7.5%; 4Q2012: 6.2%), drivenbysustained
incomegrowthand favourable labourmarket conditions. Industryengagementsalso indicated that
workers have benefitted from the implementation of theminimumwage policy in January 2013.
The strong growth in private consumptionwas reflected in the higher growth of new passenger
car sales and credit card spending. Growth of public consumption, however, moderated in the
firstquarter (0.1%;4Q2012:1.2%), reflectingmainly lowerGovernment spendingonsuppliesand
services.
On the supply side, growth in the manufacturing sector slowed, weighed down by the weak
external conditions. Despite theweakness in trade-relatedactivity, the services sector continued
toexpand, driven largelybysubsectorscatering to thedomesticmarket.Growth in theagriculture
sectorwassustainedonaccount of higherproductionof palmoil,while theminingsectordeclined
due to lower productionof crudeoil. In the construction sector, growth remained firm, ledmainly
by the civil engineering sub-sector.
(Source: Development in theMalaysianEconomy, QuarterlyBulletinFirst Quarter 2013, BNM)
Management DiscussionandAnalysis
(Cont’d)
