The Malaysian economy grew at a faster pace of 6.2% in the third quarter of 2017. Growth continued to be driven by domestic demand, particularly private sector spending. From the supply side, the improvement was broadly-based across all sectors. On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1.8% (2Q 2017: 1.3%).

Inflation moderated to 3.8% due mainly to lower transport inflation. Domestic financial stability was preserved Overall volatility in the domestic financial markets remained low amid improved domestic sentiments. Asset quality and profitability of domestic financial institutions remained healthy.

Businesses and households continued to demonstrate sound debt servicing capacity. Liquidity was sufficient to support financial intermediation and meet real economic activity needs with eligible borrowers having continued access to financing.

Going forward, the Malaysian economy is expected to register higher growth in 2017 Given the continued strong performance in the third quarter, the Malaysian economy is on course to register growth that is close to the upper range of the official projection of 5.2 – 5.7% in 2017. Domestic demand is expected to support this expansion. On the external front, exports will continue to benefit from the favourable global demand conditions. Inflation is expected to average at the upper end of the forecast range of 3 – 4% for 2017 as a whole.

Bank Negara Malaysia