Malaysia's economy grows 5.0 per cent in 2015

Bank Negara in a statement today said despite challenging environment in the final quarter of 2015, private consumption grew 4.9 per cent compared to 4.1 per cent in quarter three, contributed by higher wage and healthy labour market conditions.

Private investment grew 5 per cent compared to 5.5 per cent in third quarter contributed by capital expenditure in manufacturing and services sector.

According to central bank, domestic demand will be the supporting factor moving forward but predicted to be moderated.

Inflation in fourth quarter grew 2.6 per cent due to lower crude oil prices while the ringgit depreciates 3.6 percent against the green back during the quarter.

Bank Negara's international reserve stood at RM409.1 billion as of 31 Dec 2015.

Meanwhile, GDP growth of 5 per cent for full year 2015 is consider strong amid challenging environment especially in the second half of 2015, and it its within the range targeted by the government between 4.5 per cent to 5.5 per cent.

Alliance Bank Chief Economist Manokaran Mottain said, private consumption grew stronger than expected.

However he added first quarter of this year will be challenging as consumers become more prudent in their spending.

“Weakening of ringgit contributes to imported inflation while cost of living is higher therefore it will trim down consumer spending,” he said to Astro AWANI.

Manokaran added, household debt ratio to GDP around 87 to 88 per cent will also tarnish domestic consumption as disposable income of consumers will also be reduced.

“That is why government introduced measures to help consumers spending, among them are the deduction of 3 per cent of EPF contribution so that consumer would have more money to spend.

“However, the number of workers who choose for the deduction is still unknown,” he add.