Malaysia GDP shrinks 3.9pc in second quarter

By Adib Zalkapli
KUALA LUMPUR, Aug 26 – Malaysia’s economy shrank 3.9 per cent in the three-month period to June, an improvement from the first quarter when the country’s gross domestic product contracted 6.2 per cent, according to data released by Bank Negara today.
All economic sectors also recorded improvement with construction, services and services registering positive growth.
“Growth in the construction sector strengthened 2.8 per cent as the industry benefitted from the increased implementation of the stimulus package,” said the central bank Governor Tan Sri Zeti Akhtar Aziz.
The construction sector recorded a 1.1 per cent growth in the first quarter.
The mining and manufacturing sectors continue to shrink but both recorded slower decline.
“There are increasing signs that conditions in the global economy are stabilising,” she said.
“In the major advanced economies, the pace of the decline in economic activity is moderating, while conditions in the international financial markets have broadly improved.
“Going forward, the expectation remains that the domestic economy will improve in the second half of the year, to be supported by a recovery in domestic demand following improvements in labour market conditions, as well as business and consumer sentiments,” said Zeti.
She also said that there will be an upward revision of this year’s GDP forecast to be announced during the tabling of the 2010 budget.
In May, the Prime Minister Datuk Seri Najib Razak announced that the economy would contract between 4 and 5 per cent this year, worse than the original forecast of 1 per cent decline.
He had also predicted three consecutive quarters of negative growth, with a slight improvement for the fourth quarter this year.