(Bloomberg) — Malaysia’s economy grew at a slower-than-estimated pace in the fourth quarter as exports to China fell, signaling that a firmer recovery is taking longer than expected.
Gross domestic product grew 3.4% in the October-December period from a year ago, according to advance estimates released by Malaysia’s Department of Statistics on Friday. That’s lower than the 4.1% median estimate in a Bloomberg survey.
A slowdown in construction and stagnant manufacturing activity weighed on the economy, which grew 3.8% all of last year, below the central bank’s estimate of about 4% expansion in 2023. The final figures will be released on Feb. 16.
Malaysia is grappling with falling exports that have been dragged by China’s sputtering economy. Shipments of goods abroad fell 10% from a year earlier in December, the Ministry of International Trade and Industry said on Friday, with sales to China, its largest trading partner, shrinking 1.5%.
“Weak external demand has been the main reason for slowing growth in 2023. The slowing Chinese economy certainly plays a role,” said Mohd Afzanizam Abdul Rashid at Bank Muamalat Malaysia Bhd. “2024 is still on cautious mode”.
Malaysia’s ringgit pared earlier gains to trade little changed at 4.7178 against the dollar following the disappointing data.
The construction sector saw moderating growth of 2.5%, from 7.2% in the third quarter. Meanwhile, the manufacturing sector rose by just 0.1%.
–With assistance from Karthikeyan Sundaram, Claire Jiao, Cecilia Yap, Kevin Varley and Marcus Wong.
(Adds details on export, comment by economist and ringgit’s reaction starting in fifth paragraph)
