KUALA LUMPUR (NewsRise) -- Malaysia's industrial production grew at a faster-than-expected pace in December, driven by higher manufacturing and electricity output.
The industrial production index -- which measures output from factories, power plants and mines -- rose 2.7% in December from the same month a year earlier, according to a statement from the federal Statistics Department. The reading widely beat a 0.8%-1.0% year-on-year increase expected by economists and outpaced a 1.8% annual growth in November.
On a seasonally-adjusted month-on-month basis, the index expanded 2.8% in December.
Data out Thursday show on a year-on-year basis, the country's key manufacturing index rose 4.0% in December, driven by higher output of electrical and electronics products. While electricity generation rose 5.6%, mining output in Malaysia, one of Asia's net exporter of crude oil and the world's second-largest producer of natural gas after Qatar, shrank 1.5%.
On a month-on-month basis, all the indexes grew. Manufacturing index rose 3.6%, the electricity index rose 3.5% and the mining index edged 2.5% higher.
These data are provisional and can be revised later.
"We opine that IPI will continue to grow in a moderate pace of 2.6% year-on-year amid the weaker manufacturing data posted by China in Jan 2015," JF Apex said in an investor note.
The recent data lifted Malaysia's industrial output growth for October-December to 2.9% from a year earlier, the government said. While manufacturing grew 4.8% and electricity index rose 4.0%, mining output fell 2.4% on year in the fourth quarter of 2015, data show.
"With today's data, our Q4 2015 growth estimate comes to 4.4% year-on-year, which suggests annual growth of 4.9% in 2015, marginally below our forecast of 5.0% for 2015," said Barclays' regional economist Rahul Bajoria. "We expect growth to moderate to 4.7% in 2016," due to slower domestic demand, following weaker private consumption and private investment.
Last month, the government cut its initial growth forecast for this year to between 4.0% and 4.5% from up to 5.0% expansion.