In a statement, the central bank said the 4.2% growth rate was driven by stronger private expenditure and the positive turnaround in exports.
In the fourth quarter of 2023 (Q4 2023), Malaysia recorded a GDP growth rate of 2.9%. In the first quarter of 2023, the country registered a rate of 5.6%.
In a joint press conference with BNM, chief statistician Uzir Mahidin said household spending was higher in Q1 2024 amid continued growth in employment and wages.
“Better investment activities were supported by higher capital spending by both the private and public sectors.
“Exports rebounded amid higher external demand. On the supply side, most sectors registered higher growth.”
He said the manufacturing sector was lifted by a rebound across both the electrical and electronic (E&E) and non-E&E industries.
“The stronger growth in the services sector was driven by higher retail trade activities and continued support from the transport and storage subsector.
“On a quarter-on-quarter seasonally adjusted basis, the economy expanded by 1.4%.”
Meanwhile, headline inflation for Q1 2024 remained moderate at 1.7%, in comparison with 1.6% in Q4 2023.
BNM governor Abdul Rasheed Ghaffour said the modest increase in headline inflation reflected the policy adjustments to water tariffs (which went up by 20.8%) in February and service tax for high-usage electricity in March, which increased by 0.7%.
Core inflation, on the other hand, dropped to 1.8% from 2% in Q4 2023, “largely driven by continued easing in the food and beverages segment”, he said.
“Inflation pervasiveness edged higher, as the share of Consumer Price Index (CPI) items recording monthly price increases rose to 44.2% from the 36.3% recorded in Q4 2023.
“Nonetheless, this remains well below the first quarter long-term average (corresponding first-quarter periods during 2011-2019) of 52.2%.”
Rasheed noted that the pressure on the local currency has lessened, following the coordinated initiatives by the government and BNM with government-linked companies and government-linked investment companies.
He added that the ringgit performed better as engagements with corporates and exporters have gained further traction, translating into greater and more consistent flows into the foreign exchange market.
“Pressure on the ringgit has decreased if you consider where we started from the time we initiated action on Feb 26. These have resulted in positive outcomes,” Rasheed said.