Malaysia's GDP shrinks in the third quarter
Malaysia's GDP shrinks in the third quarter
KUALA LUMPUR (AFP): Malaysia's economy shrank 8.6 percent in
the September quarter, the sharpest contraction in the current
downturn and also the steepest among Asian economies except
Indonesia, the central bank said on Saturday.
Among the main components of gross domestic product (GDP), a
country's total output of goods and services adjusted for foreign
income, manufacturing output dived 14.3 percent from a year
earlier while construction slumped 28.2 percent.
Agricultural output also declined, falling 8.6 percent, but
activity in the services sector grew 1.2 percent and mining
output was up 1.7 percent.
Bank Negara Malaysia noted, however, that GDP grew 2.3 percent
from the June quarter, up fractionally from 2.2 percent in the
previous three months and the strongest quarterly growth rate
since the September quarter last year.
"Signs of recovery are emerging with latest indicators
pointing towards gradual improvement in economic conditions,
particularly since September," a statement said, referring to a
series of measures under the central bank's new governor and
deputy governor who took control on Sept. 1.
The measures included exchange controls to "insulate" Malaysia
from the outside world along with steps to improve liquidity
through additional cuts in interest rates and further lowering
statutory reserve requirements for banks.
"Latest indicators, including lower inflation, provide
encouraging signs that the contraction in the economy has
bottomed out and the economy is now entering the recovery phase,"
the statement said.
"Based on current developments, we can expect to see
improvement in the economy from the fourth quarter onwards," it
said, adding the government would remain "vigilant" while
continuing to carry out structural change in the battered
financial sector to help and sustain economic recovery.
Comparative data provided by the central bank showed the 8.6
percent slump in Malaysia's GDP in the September quarter eclipsed
the contractions in most of the other leading East Asian
economies in the same period.
In Hong Kong, for example, GDP shrank 7.0 percent while South
Korea's economy contracted 6.8 percent. Singapore and the
Philippines suffered declines of less than one percent. But
Malaysia's downturn paled in comparison with Indonesia where
economic activity plummeted 17.4 percent.
Bank Negara said the 14.3 percent plunge in manufacturing
reflected declines in the production of construction-related
materials, especially cement, iron and basic steel, as well as
fabricated metal and tobacco.
These declines offset a boost in the transport equipment
sector arising from increased car sales in the September quarter
and strong growth in the rubber products industry, fueled by
demand from the United States and Europe.