(Bloomberg) -- Malaysia’s economic growth eased in the third quarter to its slowest pace in a year amid declining exports and weaker factory output.
Gross domestic product rose 4.4% in the three months through September from a year ago, according to figures from the central bank. That matched the median expectation in a Bloomberg survey of economists.
The slower third-quarter print comes after Malaysia’s economy bucked the regional trend in the previous three months by expanding 4.9% -- its fastest pace in more than a year -- even as its neighbors’ growth slowed. Analysts are calling for Malaysia’s central bank to begin easing borrowing costs next year after a surprise cut last week to banks’ reserve ratio requirement hinted at the need to bolster growth.
Signs of strain have begun to show in Malaysia’s economy as exports slid in September by the most since 2016 and industrial production growth eased in the three months through September. The global downturn has put pressure on Prime Minister Mahathir Mohamad’s government, which widened its 2020 budget deficit target to support growth, delaying its goal of fiscal consolidation.
In slides accompanying the data release, Bank Negara Malaysia said the economy will remain “resilient” this year and next and that monetary policy “remains accommodative and supportive of economic activity.” The central bank is maintaining its full-year forecast of 4.3%-4.8% GDP growth for 2019, governor Nor Shamsiah Mohd Yunus told reporters.
Data on Friday showed annual growth in GDP components slowed almost across the board compared to the second quarter. Domestic demand and a resumption of big-ticket transport projects will help support the economy going forward, while risks include the trade war and commodity-price volatility, the central bank said.
Despite the overall decline in exports as global growth slows, U.S.-China trade tensions have allowed Malaysia to ship an additional $1.4 billion of goods to the world’s two largest economies from January through August, the central bank said.
Asked if last week’s RRR cut was a prelude to further adjustments to Malaysia’s benchmark rate, Shamsiah said the central bank is “not on a preset” course and will monitor incoming data. The central bank has cut rates once this year by 25 basis points, less than the easing carried out by many of its Southeast Asian peers.