Malaysia's rapid growth eases slightly

Malaysia's rapid growth eases slightly

KUALA LUMPUR (Reuter): Malaysia's rapid economic growth eased
slightly to 8.8 percent in the third quarter of 1995, compared
with 9.6 percent growth in the first half of the year, the
central bank said yesterday.

Bank Negara, in a quarterly report on the economy, also said
Malaysia showed a quarterly trade deficit of 2.7 billion ringgit
(US$1.08 billion) in the third quarter, compared with 3.8 billion
($1.52 billion) in the second.

Both sets of figures cheered the financial markets, which have
been concerned that the economy is becoming overheated and
sucking in too many imported goods, analysts said.

The bank's report said the annual rate of inflation, as
measured by the consumer price index (CPI), was 3.5 percent in
the third quarter, down from 3.7 percent in the second.

The main reason for the slight moderation in growth of gross
domestic product was a decline in oil production caused by the
temporary shutdown for repairs of a key oil platform, Bank
Negara's report said.

The manufacturing, construction and services sectors showed
continued strong growth in the third quarter, but agriculture and
mining showed slower rates of growth, the report said.

Malaysia's economy has been expanding at an annual rate of
nearly nine percent over the past eight years.

Consumption spending rose sharply in the third quarter of 1995
over the second, the report said.

Private consumption lending grew by an annualized 31.5
percent, against 22.7 percent in the second quarter, it said.

The bank has been nudging up interest rates to curb loans
growth, in both the public and private sectors.

The benchmark three-month Kuala Lumpur interbank offered rate
currently stands at 6.80 percent, compared with 5.46 percent at
the end of last year.

The decline in the quarterly trade deficit was due to a
moderation in import growth to 24.5 percent in the third quarter
from 30.3 percent in the second, the report said.

The Finance Ministry last month estimated the merchandise
trade deficit for the year would balloon to 9.64 billion ringgit
($3.85 billion) from 2.23 billion ($892 million) last year.

The current account, which includes trade in services as well
as merchandise, is officially projected to show a deficit of 18.1
billion ringgit ($7.24 billion) in 1995, against 10.9 billion
($4.36 billion) last year.

Approved investment projects totaled 3.5 billion ringgit ($1.4
billion) in the third quarter of 1995, against 6.9 billion ($2.76
billion) in the previous quarter and 2.17 billion ringgit ($868
million) in the first quarter.