While the growth as measured by the gross domestic product (GDP) was faster than expected, the country grew at a slower pace compared with 6 per cent growth in 2014.

The Statistics Department said on Thursday that in the fourth quarter (Q4, 2015), Malaysia’s GDP expanded at a slower pace of 4.5 per cent compared to 4.7 per cent in the third quarter.

“On a quarter-on-quarter seasonally adjusted, the economy increased 1.5 per cent,” the department said.

Services sector

The department said that in the fourth quarter, the services sector expanded at a faster pace of 5.0 per cent from 4.4 per cent in the third quarter (Q3, 2015).

“The performance of services sector was underpinned by wholesale and retail trade which advanced to 6.5 per cent. Information & communication remained resilient by posting a growth of 9.2 per cent.

“Meanwhile, transportation & Storage rose to 6.0 per cent following a better momentum in freight and passenger segments,” it said.

Manufacturing sector

As for the manufacturing sector, it expanded at a faster pace of 5 per cent (Q3, 2015: 4.8 per cent).

It said the key driver in manufacturing, electrical, electronic & optical products posted a sturdy growth at 10.5 per cent reflecting a higher momentum in consumer electronics and medical equipment products.

Construction

Construction sector grew 7.4 per cent (Q3, 2015: 9.9 per cent). Civil engineering posted an impressive growth of 20.4 per cent, supported by oil and gas and transportation related projects. Residential buildings recorded a 5.7 per cent growth, up from 5.2 per cent in the preceding quarter.

Meanwhile, central bank, Bank Negara Malaysia (BNM) said the Malaysian economy is expected to face a challenging operating environment in the immediate future.

The central bank said growth would continue to be driven by domestic demand, with some support from net exports.

“Nevertheless, the pace of domestic demand expansion is projected to moderate. While the growth in income and employment continues to support private consumption, it is expected to moderate as households continue to adjust to the higher cost of living.

“Meanwhile, private investment is projected to moderate to below its long term trend but will nevertheless be supported by the capital expenditure in the manufacturing and services sectors, as well as the implementation of infrastructure projects.

“The downside risks to growth will however remain, given the continued uncertainty in the external environment and the on-going reforms in the domestic economy,” it said.