KUALA LUMPUR: Malaysia's economy grew by 5.6 per cent in the first quarter of 2017, its fastest pace in two years, and beating expectations by economists who had projected growth of between 4.8 to 4.9 per cent.
Bank Negara Malaysia (BNM) said on Friday (May 19) that growth was lifted by stronger domestic demand, particularly private sector spending, while the manufacturing and services sector bolstered improvement on the supply side.
The central bank added that the current account surplus narrowed to 5.3 billion ringgit (US$1.2 billion) in the first quarter, from 12.5 billion ringgit in October-December.
BNM said the economy is on track to register higher growth for the rest of the year. "Our assessment is that the Malaysian economy is poised to register better performance," said Muhammad Ibrahim, governor of Bank Negara.
"Growth will remain driven mainly by sustained domestic demand with additional support from improvements in export as global trade picks up," he added.
"Malaysia's diversified economic structure supported by sound macroeconomic fundamentals continue to enable us to withstand challenges in the global and domestic environment."
Private consumption rose 6.6 per cent, while investments grew sharply by 12.9 per cent following continued capital spending in the services and manufacturing sectors.
Investments in machinery and equipment were higher during the quarter, supported by the implementation of several large-scale projects in the manufacturing sector.