(Bloomberg) -- Malaysia’s economy quickened by the most in a year, signaling that firmer recovery is underway in the Southeast Asian nation.

Gross domestic product rose 3.9% in the January-March period from a year ago, according to advance estimates from Malaysia’s Department of Statistics on Friday. That’s in line with the median estimate in a Bloomberg survey.

The nation’s services sector drove the economy, while the manufacturing sector rebounded 1.9% in the quarter following a contraction in the previous three months, the statistics department said.  Trade surplus rose to 12.8 billion ringgit ($2.7 billion) in March, the government said in a separate statement, exceeding analysts’ forecast.

“One positive feature is that manufacturing is turning up,” said Sanjay Mathur, an economist with Australia & New Zealand Banking Group Ltd. “The March trade surplus suggests that the drag from ‘net exports’ on overall growth is fading.” 

The growth print suggests Malaysia’s economy is regaining momentum after moderating last year on tepid global demand. The trade-reliant nation is poised to benefit should China — Malaysia’s largest trade partner — continue to build on its surprise strong start. Bank Negara Malaysia expects GDP to expand between 4% and 5% this year on improving external demand.

Malaysia’s exports extended declines for a second month in March after a pickup in January, though the decline wasn’t as sharp as analysts had expected. Shipments of goods abroad fell 0.8% from a year earlier in March, according to the Ministry of International Trade and Industry. Exports had fallen for 10 straight months through December, the worst streak since the global financial crisis of 2008-2009.

The ringgit held a 0.1% gain versus the US dollar as of 12:21 p.m. in Kuala Lumpur following the economic numbers. The local benchmark stock index was up for a third day.

--With assistance from Tomoko Sato, Kevin Varley, Joy Lee and Marcus Wong.

(Adds details on trade surplus, exports and comment by economist starting in third paragraph.)

©2024 Bloomberg L.P.