18.08.201007:15:00UTC+00Malaysia's GDP Grows 8.9% In Q2

Malaysia's economy expanded 8.9% year-on-year in the second quarter, the Department of Statistics said Wednesday. That was better than the expected growth of 8.4%. In the first quarter, the economy grew 10.1%, the largest expansion since the first quarter of 2000.

Final consumption expenditure strengthened further by registering a growth of 7.7% in the second quarter as compared to 5.3% in the previous quarter. Gross fixed capital formation recorded a double digit growth of 12.9%. External demand remained resilient with exports recording a growth of 13.8%. Similarly, imports increased 21.9%.

The agriculture sector grew at a slower pace of 2.4% compared with the 6.8% rise in the previous quarter. The manufacturing sector continued its momentum for the second consecutive quarter by registering a double-digit growth of 15.9%.

In the first six months of the year, the economy rebounded by growing 9.5%, reversing a 5.1% decline the same period last year, the statistical agency said.

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. The Bank Negara Malaysia raised the overnight policy rate by 25 basis points to 2.75%.

The International Monetary Fund said on Friday 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 should moderate in 2011.

Copyright(c) 2010 News.com, Inc. All Rights Reserved