Per trader

18.08.201008:37:00UTC+00Malaysia's Economic Growth Cools In Q2

Malaysian economic growth eased in the second quarter from a decade-high recorded in the first three months of the year. However, the latest expansion exceeded economists' expectations.

Gross domestic product, or GDP, rose 8.9% year-on-year during the April to June period following a 10.1% increase in the first three months of the year, the Department of Statistics said Wednesday. Economists had expected the economy to expand 8.4%. The economy rebounded in the first half of 2010 with a growth of 9.5% compared to a 5.1% contraction in the same period last year.

On the supply side, all the sectors maintained their positive growth with manufacturing and services sectors continuing to be the impetus, the statistical agency said. On the demand side, the economic growth was underpinned by the buoyant private final consumption and gross fixed capital formation as well as a steady growth in exports.

A breakdown of data showed that final consumption expenditure strengthened further by registering a growth of 7.7% in the second quarter compared with a 5.3% rise in the previous quarter. Private final consumption expenditure increased by 7.9%, faster than the 5.1% rise seen in the first quarter. On the other hand, government final consumption expenditure increased 6.9%.

Gross fixed capital formation recorded a significant double digit growth of 12.9%, reflecting the remarkable expansion in the expenditure on machinery and equipment and transport equipment components. The figure quickened from just 5.4% recorded in the first quarter.

External demand remained resilient with exports recording a growth of 13.8%, mainly led by higher demand for electric and electronics and petroleum and gas industry. Similarly, imports increased by 21.9%, contributed by the higher demand for intermediate, capital and consumption goods.

Malaysia's manufacturing sector continued its momentum for the second consecutive quarter by registering a double-digit growth of 15.9%. The construction sector expanded 4.1% and the services sector grew 7.3%. The mining and quarrying sector growth eased to 1.9% from 2.1%.

In July, Malaysia's central bank raised its key policy rate for the third time this year as it expects the domestic economy to remain strong, along with moderate inflation levels for the rest of this year. Bank Negara Malaysia raised the overnight policy rate by 25 basis points to 2.75%.

Earlier in the day, figures from the statistical office showed that Malaysia's consumer prices rose 1.9% annually in July following a 1.7% rise in June. Month-on-month, consumer prices grew 0.3% in July.

The International Monetary Fund said last week that the monetary tightening in Malaysia so far has been broadly appropriate and the stance remains accommodative. The lender projects the Malaysian economy to expand by around 7% this year. As positive base effects play out and policy support is reeled in, growth is expected to moderate in 2011.

Torna all'elenco