KUALA LUMPUR — Malaysia’s economy posted double-digit growth for the first time in over a year in the third quarter, boosted by rising domestic demand and strong exports, the central bank said on Friday.
Gross domestic product (GDP) in July-September rose 14.2% from a year earlier, at a faster pace than the 11.7% growth forecast in a Reuters poll and up from the 8.9% annual rise in the previous quarter.
That was also the fastest pace of growth since the second quarter of 2021, when the economy expanded 16.1%.
Bank Negara Malaysia (BNM) said the jump was driven by a continued expansion in domestic demand, a firm recovery in the labor market, robust exports, and ongoing policy support.
“Because of the healthy growth outturn, growth this year will exceed the 7% projected earlier,” BNM Governor Nor Shamsiah Yunus told a news conference.
Malaysia’s economy has recovered strongly from a pandemic-induced slump, though risks of a global slowdown are clouding the outlook.
The government last month revised up its growth forecasts for 2022 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 it will remain elevated, BNM said.
Inflation in Malaysia has been largely contained by record government subsidies and price control measures this year, but upside risks remain, with the central bank delivering its fourth consecutive 25-basis-point rate hike last week.
Since May, BNM has raised rates by a total of 100 basis points from a historic low of 1.75%, in a bid to temper inflation. (Reporting by Rozanna Latiff and Mei Mei Chu; Editing by Ana Nicolaci da Costa)