ASEAN KEY DESTINATIONS
Malaysia records better than expected growth
Growth of the Malaysian economy in 2010 beat official expectations as the economy expanded by 7.2 percent compared with the official projection of 7 percent. The economy contracted by 1.7 percent in 2009.
Much of the growth for the year was provided by the two largest segments of the economy services and manufacturing which grew by 6.8 percent and 11.4 percent in 2010.
The construction sector, which is universally acknowledged to have the deepest linkages within the economy, expanded by 5.2% last year compared with 5.8% in 2009.
Spending by households and businesses also drove private consumption up steeply to report a growth rate of 5.3 percent compared with 1.2 percent before.
“Going forward, the global economic recovery is expected to remain uneven across the different regions,” Bank Negara said in a statement.
“While short-term prospects for the advanced economies improved recently, uncertainties remain over weak fiscal positions, high unemployment and constrained lending conditions.”
It said the growth outlook for Asia, however, remained favourable but regional economies were confronted with the challenges of rising inflationary pressures, particularly from high commodity and fuel prices, and the large and volatile capital flows.
“The pace of growth of the Malaysian economy will be affected by the environment of moderating external demand,'' it said.
Bank Negara said growth would, nevertheless, be supported by continued expansion in domestic demand and private consumption spending would continue to benefit from the favourable labour market conditions, firm commodity prices and access to financing.
“The roll-out of construction and infrastructure activities and the implementation of the economic transformation programme by the Government are likely to provide significant support to the growth momentum in private investment,'' it said.
Bank Islam chief economist Azrul Azwar Ahmad Tajudin expects the pace of moderation of the economy as shown from the second quarter onward to continue until the second half of this year.
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