KUALA LUMPUR, Feb 12:
Driven largely by domestic economic demand, Malaysia posted gross domestic product (GDP) growth of 5.8% in the fourth quarter of last year and 6% overall for 2014, compared to 4.7% in 2013.
Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz today said the economic performance was an improvement over the 5.6% GDP growth in the third quarter of 2014 with the fourth quarter’s stronger growth driven mainly by stronger private sector spending.
Given that domestic demand powers around 75% of Malaysia’s economy, she said the nation is well insulated against external shocks and exports provide a further boost to the country’s overall revenue.
Lower global crude oil prices are expected to further boost Malaysia’s economy due to the nation being a net importer. Zeti said the local financial system is also well capitalised and has so far been able to absorb any impact of foreign funds outflows.
She said private investment expanded at a faster pace of  11.2% compared to 6.8% in the previous quarter, supported by stable labour market conditions and continued wage growth.
The services sector grew 6.4% with an expansion across all its sub-sectors.
The manufacturing sector recorded a sustained growth of 5.2% supported by a stronger performance in the exports of the electric and electronic clusters.
Private consumption grew at a stronger pace of 7.8%, driven by stable labour market conditions with sustained employment and low rate of unemployment.
Malaysia posted a low unemployment rate of 2.8%, which Zeti said effectively means the nation has full employment, while inflation moderated to 2.8% in the fourth quarter of 2014.
“Looking ahead, the lower oil prices is expected to raise household disposable income by about RM7.5 billion in 2015.”
Zeti said inflation is projected to be lower in 2015 on expected lower oil prices and would further provide support for private consumption activities.