Malaysia's economy expanded by 5.3% in the third quarter compared to the same period last year, marking a slowdown from the 18-month high seen in the previous quarter, according to the government and central bank on Friday. 

Economists polled by Reuters had predicted a 5.3% year-on-year growth for the July-to-September period, a decline from the 5.9% growth in the preceding quarter. This forecast was in line with the government's preliminary estimate issued last month.

Bank Negara Malaysia (BNM) stated that the growth in the third quarter was primarily driven by strong performance in investment and exports.

“Growth of the Malaysian economy will be driven by robust expansion in investment activity, continued improvement in exports, and resilient household spending,” BNM Governor Abdul Rasheed Ghaffour said in a statement. 

Furthermore, both headline and core inflation have averaged 1.8% year-to-date and are expected to remain manageable heading into 2025, the central bank stated.  

However, the inflation outlook is still influenced by government policies, global commodity prices, and financial market developments, Reuters reports.  

The government plans to reduce blanket subsidies for a commonly used transport fuel in mid-2025, following similar cuts earlier this year for diesel, electricity, and chicken. 

Last month, the government revised its 2024 economic growth forecast to a range of 4.8% to 5.3%, up from the previous projection of 4% to 5%. 

In addition, the central bank attributed the Ringgit's strength in the third quarter partly to the US Federal Reserve's shift towards an easing cycle and emphasised that Malaysia's economic outlook and ongoing reforms would help support the currency in the medium term. 

The Ringgit has bounced back from a 26-year low in February, strengthening by about 2% against the Dollar this year.  

Earlier this month, the central bank kept its key interest rate unchanged at 3.00%, signalling its positive outlook for both growth and inflation.