Malaysia’s full year growth could surpass the government’s earlier forecast of 4-5 per cent after the economy expanded by 5.2 per cent in the third quarter, said Bank Negara today.
“We expect it (the full year growth) to be at least five per cent or better given that the first three quarters were better than expected,” Bank Negara governor Tan Sri Zeti Akhtar Aziz (picture) said at a press conference here.
Zeti also said that the economy was expected to grow at a similar rate in the fourth quarter.
“The fourth quarter (growth performance) is likely to continue very much as the third quarter,” she said.
The economy grew by 5.6 per cent in the second quarter and by 4.7 per cent in the first quarter.
Growth in the second quarter was revised upwards from 5.4 per cent to 5.6 per cent due to new data, said Zeti.
The Malaysian economy was affected by weaker external demand, which led to a 50.5 per cent decline in net exports of goods and services but the drop was partially offset by sustained growth in domestic demand.
Domestic demand continued to drive the country’s economic growth with private sector demand growing 11.6 per cent in the third quarter and public sector demand expanding 10.9 per cent.
“We are not insulated from external uncertainties but the anchor to the economy is domestic demand,” said Zeti.
Private consumption grew by a slower pace of 0.8 per cent in the third quarter as compared with 2.8 per cent the previous quarter, helped by government aid policies, such as the RM500 handouts to low-income households, bonuses and readjusted pensions to civil servants.
Inflation moderated to 1.4 per cent in the third quarter from 1.7 per cent in the second quarter.
“However, we can’t rule out upside risks to inflation...” Zeti said.
Net financing grew by 12.8 per cent while loan growth increased 11.9 per cent.
Zeti said based on stress testing, Malaysian banks remain well capitalised and the risk of deleveraging by European banks to Malaysia remained low.
“Stress tests affirm the resilience of financial institutions under severe contraction and extreme volatility and under the worst case scenario, capitalisation of Malaysian banks remain satisfactory,” she said.
Zeti said that while external sector weakness will affect overall growth, factors underpinning domestic demand are expected to remain firm.
She said that private consumption will be supported by stable employment conditions, income growth and cash transfers while investment activity will be led by business spending in domestic oriented sectors, infrastructure projects and the oil and gas sector.
Zeti , When you announced GDP PLease also announce The DEBT RATIO against it .You can say what ever you like , but when you ask the retail business people ,The answer will be VERY BAD. Zeti please only the truth, we are literate malaysians..
How can our GDP expand when everybody else is shrinking? This growth is no growth but artificial number generated by excessive borrowing and spending by the government. This funny growth is going to translate into financial pain down the road for all of us.
Malaysia is a small country and "artificial growth" in economy could easily be done (manipulated) by injecting several billions of ringgits into the stock markets. The real economy will withstand several Quarters (not just by one Quarter). Last Quarter, there was an "artificial growth" in certain counters at KLSE due to manipulation of funds and speculations. But now, every counters seems to come back to normal. So, this is what I call, "artificial economic growth".
I reached a point that I cannot trust any articles from the Govt, Public service, Bank Negara etc. UMNO may call it a perception but remember, perceptions are build by UMNO policy and corruptions + abuse of power. PR, cyber news and bloggers merely investigate and bring thenews to rakyat. It would be positive if UMNO rectify it but..... ( noticed I only mentioned UMNO and not the BN component parties since they are toothless).
Pls note that the world economy are going down hill and Msia is export oriented, how can we see growth? Another election brainwashing strategy? Do you know how many factories are retrenching and having 4 days week working day (esp electronics?
I am sorry, I dont buy what you said