Malaysia's economy likely grew by 5.3% in the third quarter compared to the same period last year, marking a slowdown from the 5.9% growth seen in the previous quarter, according to official preliminary estimates released on Monday.

During the second quarter, Malaysia’s GDP had reached its highest growth rate in 18 months, driven by increased household spending, exports, and investment. 

Last week, the government revised its 2024 economic growth forecast upward to a range of 4.8% to 5.3%, from the previous estimate of 4% to 5%, Reuters news agency reports.

According to data from the Statistics Department, growth in Q3 was primarily fuelled by a 5.1% year-on-year increase in the services sector and expansion in the manufacturing, construction, and agriculture sectors.

However, the country’s mining and quarrying sector contracted by 3.4%, driven by declines in the natural gas and crude oil and condensate sub-sectors. 

In addition, the data also revealed that exports rose by 7.8% year-on-year in the third quarter, while imports surged by 20.8%.

Chief Statistician Mohd Uzir Mahidin noted that the economy is expected to be supported by a stable labour market, moderate inflationary pressure, accommodative fiscal and monetary policies, and a continued recovery in the tourism sector.

“Additionally, positive trends in consumer spending and rising investment are set to spur the economic growth in this quarter,” he commented in a statement.

The final GDP figures for the third quarter are scheduled to be released on 15th November.

Furthermore, Malaysia’s government projects economic growth of around 4.5% to 5.5% in 2025, surpassing the 4.6% expansion forecasted by analysts surveyed by Bloomberg. 

This optimism is driven by expectations of higher salaries for civil servants and plans to raise the minimum wage in the private sector, both of which are set to boost domestic demand in 2025.