Bankruptcies in Malaysia hit a high

Bankruptcies in Malaysia hit a high

KUALA LUMPUR : A total of 12,268 Malaysian companies and individuals went bankrupt in 2002 -- the highest yearly figure since 1985 and up five percent from 11,685 cases in 2001, a report said.

The Edge newspaper Sunday said last year's bankruptcies (personal and corporate) also grew by more than 50 percent since 1998, when the economy underwent its worst recession since the country's independence in 1957.

"Bankruptcy numbers are lagging indicators for the economy, so with the slow economic pick-up coming out of 2001 we may see bankruptcies continue to rise," an economist said.

Wong Chee Seng, senior economist at DBS Bank said: "Assuming that the economy (this year) grows by the projected four to five percent, the bankruptcy numbers will stabilize -- but if there is sub-par growth at two to three percent, the problem of rising bankruptcies will come back."

The Malaysian government was expected to introduce a new financial package to control the likely adverse impact resulting from the Iraq war.

The government has projected GDP to grow between six to 6.5 percent this year but Prime Minister Mahathir Mohamad, who is also finance minister, recently said growth in 2003 would be lower at four percent. --AFP