KUALA LUMPUR, Aug. 13 (Xinhua) -- Malaysia's economy expanded by a moderate 4.9 percent in the second quarter of 2015, compared with 5.6 percent in the first quarter.
The central bank said the private sector remained the key driver of growth during the quarter.
Private consumption expanded at a more moderate rate of 6.4 percent compared with 8.8 percent in the last quarter as households adjust to the implementation of the Goods and Services Tax (GST) in April, the central bank said in a statement on Thursday.
The growth in private investment slowed down to 3.9 percent compared with 11.7 percent in the first quarter, due to a decline in spending on machinery and equipment, especially in the transportation segment, and slower investment in dwelling services.
Malaysia is on the same page with the global economy, which also saw a moderate pace expansion, said central bank Governor Zeti Akhtar Aziz.
The Malaysia ringgit weakened beyond 4 ringgit to a dollar this week for the first time since the 1998 financial crisis. It has dropped about 13 percent against the U.S. dollar this year, making it one of the weakest performing currencies in Asia.
But Zeti ruled out a fix exchange rate that the government implemented at the height of the financial crisis in 1998.
The central bank said the Malaysian economy is expected to remain on a steady growth path, with domestic demand continuing to be the key driver of growth.
"Private consumption is expected to continue to adjust to the introduction of the Goods and Services Tax (GST), although wage growth and stable labor market conditions would provide support to household spending," it said.
The central bank added that the Investment activity would be supported by capital spending in the manufacturing and services sectors, as well as for infrastructure projects. These developments will contribute towards offsetting the weaker performance of the external sector.