Strong rebound
7.2pc growth last year the fastest for Malaysia since 2000.
KUALA LUMPUR: The Malaysian economy surged strongly by 7.2 per cent last year, as it emerged from the global economic crisis.
Coming above official expectations, this is the fastest growth pace Malaysia has enjoyed since 2000, economists said.
The economy contracted by 1.7 per cent during the economic crisis in 2009.
Bank Negara Malaysia, in releasing the details of last year’s economic performance yesterday, said economic activities between October and December had slowed at a rate of 4.8 per cent compared with 10.1 per cent in the first quarter, 8.9 per cent in the second quarter and 5.3 per cent in the third quarter.
The weaker growth in external demand was mitigated by higher private and public sector spending, which led to stronger domestic demand in the fourth quarter.
Favourable labour market conditions, positive consumer confidence and higher income levels supported consumption.
Higher private sector capital spending was led by the expansion in the production of domestic-oriented industries, while the public sector capital investment rose as a result of higher development expenditure mainly in the education and transportation sectors.
The construction sector also registered higher growth of 5.6 per cent, reflecting growth in the nonresidential and civil engineering sub-sectors.
Weaker external demand, especially for electronics, also affected the growth of the manufacturing sector during the last quarter of 2010.
Economist Enrico Tanuwidjaja from OSK DMG expects the slower export growth trend to continue until June.
“However, with our revised 2011 US growth outlook to an average of 3.2 per cent from 2.6 per cent before, we think that Malaysian exports could recover faster in the second half of the year to 11.2 per cent,” he said, adding that the low-base effects would also give room for growth.
Bank Negara also said that net foreign direct investments had increased to RM8.3 billion in the fourth quarter, from RM4.4 billion in the third quarter, mainly in the services, manufacturing and mining sectors.
Apart from a resilient banking sector with capital buffers of more than RM60 billion, insurance and takaful operators enjoyed better profits in 2010, mainly to improved investment performance, more favourable claims experience in the general business segment and continued business expansion.
On 2011, the central bank said the economy would be affected by the weak external demand.
Private consumption spending will continue to benefit from the labour market conditions, commodity prices and access to financing.
“The roll-out of construction and infrastructure activities and the implementation of the Economic Transformation Programme by the government are likely to provide significant support to the growth momentum in private investment.” It warned that global economic recovery would remain uneven across different regions although the growth outlook for Asia remains strong, supported by domestic demand.
KUALA LUMPUR: The Malaysian economy surged strongly by 7.2 per cent last year, as it emerged from the global economic crisis.
Coming above official expectations, this is the fastest growth pace Malaysia has enjoyed since 2000, economists said.
The economy contracted by 1.7 per cent during the economic crisis in 2009. Bank Negara Malaysia, in releasing the details of last year’s economic performance yesterday, said economic activities between October and December had slowed at a rate of 4.8 per cent compared with 10.1 per cent in the first quarter, 8.9 per cent in the second quarter and 5.3 per cent in the third quarter.
The weaker growth in external demand was mitigated by higher private and public sector spending, which led to stronger domestic demand in the fourth quarter.
Favourable labour market conditions, positive consumer confidence and higher income levels supported consumption.
Higher private sector capital spending was led by the expansion in the production of domestic-oriented industries, while the public sector capital investment rose as a result of higher development expenditure mainly in the education and transportation sectors.
The construction sector also registered higher growth of 5.6 per cent, reflecting growth in the nonresidential and civil engineering sub-sectors.
Weaker external demand, especially for electronics, also affected the growth of the manufacturing sector during the last quarter of 2010.
Economist Enrico Tanuwidjaja from OSK DMG expects the slower export growth trend to continue until June.
“However, with our revised 2011 US growth outlook to an average of 3.2 per cent from 2.6 per cent before, we think that Malaysian exports could recover faster in the second half of the year to 11.2 per cent,” he said, adding that the low-base effects would also give room for growth.
Bank Negara also said that net foreign direct investments had increased to RM8.3 billion in the fourth quarter, from RM4.4 billion in the third quarter, mainly in the services, manufacturing and mining sectors.
Apart from a resilient banking sector with capital buffers of more than RM60 billion, insurance and takaful operators enjoyed better profits in 2010, mainly to improved investment performance, more favourable claims experience in the general business segment and continued business expansion.
On 2011, the central bank said the economy would be affected by the weak external demand.
Private consumption spending will continue to benefit from the labour market conditions, commodity prices and access to financing.
“The roll-out of construction and infrastructure activities and the implementation of the Economic Transformation Programme by the government are likely to provide significant support to the growth momentum in private investment.” It warned that global economic recovery would remain uneven across different regions although the growth outlook for Asia remains strong, supported by domestic demand.
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