Malaysia’s Economy Grows at Slowest Rate in Six-Year

Malaysia’s economy contracted to six years low in the first quarter of the year as exports and private investment eased.

The economy grew 4.2 percent in the first quarter of 2016, slower when compared with 5.7 percent growth recorded a year ago and worse than the 4.5 percent expansion rate in the final quarter of 2015, according to the Statistic Department on Friday.

Construction sector expanded the most at 7.9 percent but slower than 9.6 percent of Q1 2015, while the agricultural sector plunged 3.8 percent from the previous decline of 4.1 percent a year ago.

Services sector that has been the driving force of the economy dropped from  6.4 percent last year to 5.1 percent, while manufacturing and mining sectors contributed 4.5 percent and 0.3 percent respectively.

On a quarterly basis, the economy grew at 1 percent in the first quarter of 2016, down from 1.4 percent recorded a year ago.

Lower oil prices continued to hurt government finances while increase in costs are crimping business investments, but the increase in domestic demand in recent years has helped offset the gap created by weak exports.

Net exports reportedly sank 0.6 percent over the year, while public sector investment was down 4.5 percent.

The ringgit fell 0.2 percent against the dollar to 4.0345 as at 2:15 p.m. in Kuala Lumpur Friday.