Services and manufacturing growth set to continue in 2023

KUALA LUMPUR: Malaysia’s services and manufacturing growth, the big factor behind the country’s strong third quarter (3Q) gross domestic product (GDP) print, are projected to continue their growth into 2023.

Moody’s Analytics, in its latest Asia Pacific Economic Preview report, said the stronger year-on-year growth of 14.2 per cent in 3Q exceeded expectations with consumption and investment contributing significantly to the growth.

It said the influx of tourists has pushed demand for the retail trade, accommodation, and food and beverage (F&B) sectors, and growth in these industries will likely carry into early 2023.

Exports of manufacturing products have stayed resilient despite the downturn in China with growth to remain robust into next year, said Moody’s Analytics.

“The electronics sectors continued to grow, spurred by demand for semiconductor chips. Malaysia houses several major semiconductor producers and exports will likely remain robust into next year,” it said.

Moody’s Analytics added that as a net exporter of crude oil and palm oil, Malaysia stands to benefit from higher commodity prices. It noted that both mining and agriculture picked up in 3Q.

These industries were affected by labour issues earlier in the pandemic.