KUALA LUMPUR: The economy grew by 4.2 per cent in the first quarter of 2016 said Bank Negara Malaysia governor Datuk Muhammad Ibrahim.
The moderation is temporary was due to external shocks to the economy and cautious spending by the private sector.
Growth will be supported improvement in private sector spending as the impact of GST and price adjustments lapse.
He said government measures are aimed at increasing disposable income.
Growth is expected to improve in the second half driven by higher production in the manufacturing sector from added capacity.
It will also be supported by improved commodities production from the diminishing effect of El Nino and higher wages for civil servants.
"Stronger and resilient macro fundamentals accords Malaysia the ability to manage current challenges through diversified sources of growth, low inflation and favourable external position."