A measure of industrial production in Malaysia rose in March, beating expectations amid a broader slowdown in economic growth in the country. The Southeast Asian country’s Department of Statistics said on Friday that a gauge of manufacturing and industrial activity registered a provisional increase of 3.1 per cent year on year. Economists polled by Reuters had forecast an uptick of just 2.4 per cent.
The level was also higher than February’s 1.7 per cent annual rise. Activity during March was boosted by higher output of food, beverages and tobacco, as well as petroleum products, the statistics agency said.
Still, the Malaysian economy faces headwinds. Earlier this week the country’s central bank cut its overnight policy rate by 25 basis points to 3 per cent, citing “unresolved trade tensions” and “country-specific weaknesses in major economies”. Malaysia is a major exporter to China and exposed to any significant slowdown in the world’s second biggest economy. Malaysian gross domestic product growth fell to 4.7 per cent in 2018, from 5.9 per cent the previous year.
Prakash Sakpal, economist at ING, said before the release that the risks to economic growth remained “on the downside”, and expected growth to slow further to 4.2 per cent in 2019, thereby validating the central bank’s rate cut decision this week.