By Jason Ng
KUALA LUMPUR--Malaysia's economy accelerated in the second quarter on the back of higher exports and resilient private-sector activity, even as domestic demand moderated.
Gross domestic product rose 6.4% in the second quarter from a year earlier, faster than the 5.8% median forecast from a Wall Street Journal poll of 15 economists.
The Southeast Asian economy expanded 1.8% from the first quarter on a seasonally adjusted basis, central bank data showed Friday. The data are provisional and may be revised.
The economy grew 6.2% on year in the first three months of the year.
The manufacturing and services sectors were the main drivers of growth. Private-sector consumption and investment eased, while public-sector activities contracted.
Bank Negara Malaysia Gov. Zeti Akhtar Aziz said full-year growth will likely exceed earlier projections of between 4.5% and 5.5% in 2014. The central bank will issue a revised forecast after the government's budget presentation in October, she said.
"For the Malaysian economy, the leading indicators now suggest that private-sector activity will remain the key driver of growth," Ms. Zeti said.
Exports will continue to benefit from the global economy recovery but growth is expected to moderate in the second half of the year partly because of a higher base of comparison, she added.
Ms. Zeti said inflation is expected to remain within 3%-4% this year and "temporarily rise" in 2015 before stabilizing toward the "long-term average" of 3% in 2016, thanks to subdued external price pressures and moderate domestic demand.
The government plans to introduce a long-delayed consumption tax of 6% in April 2015 and gradually shrink its subsidy program that covers wide-ranging essential goods from gasoline to cooking oil.
Following are selected economic indicators released by the central bank:
2nd Qtr 1st Qtr
Gross Domestic Product +6.4% +6.2%
Manufacturing +7.3% +6.8%
Services sector +6.0% +6.6%
Mining sector +2.1% -0.8%
Agriculture sector +7.1% +2.3%
Private Sector Consumption +8.1% +8.8%
Public Sector Consumption -2.1% +2.7%
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(END) Dow Jones Newswires
August 15, 2014 01:08 ET (05:08 GMT)
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