KUALA LUMPUR, Feb 27 — Malaysia is heading towards recession this year after economic growth stopped at 0.1 per cent in the last quarter, the slowest annual pace since 2001, due to weakening external demand.
The slump also slashed the 2008 GDP growth to 4.6 per cent, falling from 6.3 per cent in 2007 despite optimistic projections of at least 6 per cent.
Government officials and economists had earlier forecast for 0.5 to 1 per cent growth for the 2008’s fourth quarter but Bank Negara figures today revealed that the economy slowed faster than expected.
Finance Minister Datuk Seri Najib Abdul Razak said today the bleak figures will prompt the government to revise downwards its forecast of 3.5 per cent GDP growth for 2009.
“I do not think that we can anticipate an improvement in the GDP figures for the next quarter, but of course, it all depends on the situation in the United States and Europe,” said the deputy prime minister who is set to table a new stimulus package on March 10.
Most of Malaysia’s main trading partners entered recession since last year but Putrajaya had been optimistic of staving off the downturn although recent export and jobless figures painted a pessimistic outlook.
The Statistics Department said the manufacturing sector contracted 8.8 per cent for the first time after 26 consecutive positive quarters while construction shrank by 1.6 per cent from a 1.2 per cent growth.
But the services sector continued to expand to 5.6 per cent from 7.1 per cent in the previous quarter while agriculture slowed to 0.5 per cent from 3 per cent in the same period.
Authorities said services continued to boost the supply side while private and government consumption expanded growth on the demand side.
Bank Negara disclosed that inflation fell to 5.9 per cent in the fourth quarter from 8.4 per cent in the previous quarter due to adjustments in fuel prices.
“The downward trend in inflation is expected to continue in 2009,” Bank Negara said.
The slump also slashed the 2008 GDP growth to 4.6 per cent, falling from 6.3 per cent in 2007 despite optimistic projections of at least 6 per cent.
Government officials and economists had earlier forecast for 0.5 to 1 per cent growth for the 2008’s fourth quarter but Bank Negara figures today revealed that the economy slowed faster than expected.
Finance Minister Datuk Seri Najib Abdul Razak said today the bleak figures will prompt the government to revise downwards its forecast of 3.5 per cent GDP growth for 2009.
“I do not think that we can anticipate an improvement in the GDP figures for the next quarter, but of course, it all depends on the situation in the United States and Europe,” said the deputy prime minister who is set to table a new stimulus package on March 10.
Most of Malaysia’s main trading partners entered recession since last year but Putrajaya had been optimistic of staving off the downturn although recent export and jobless figures painted a pessimistic outlook.
The Statistics Department said the manufacturing sector contracted 8.8 per cent for the first time after 26 consecutive positive quarters while construction shrank by 1.6 per cent from a 1.2 per cent growth.
But the services sector continued to expand to 5.6 per cent from 7.1 per cent in the previous quarter while agriculture slowed to 0.5 per cent from 3 per cent in the same period.
Authorities said services continued to boost the supply side while private and government consumption expanded growth on the demand side.
Bank Negara disclosed that inflation fell to 5.9 per cent in the fourth quarter from 8.4 per cent in the previous quarter due to adjustments in fuel prices.
“The downward trend in inflation is expected to continue in 2009,” Bank Negara said.
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