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M'sia faces worse recession
Prime Minister Najib Razak said exports have plummeted by 25 per cent and private investment has fallen by 26 per cent in the first quarter this year, compared to the same period last year. -- PHOTO: REUTERS
PUTRAJAYA (Malaysia) - MALAYSIA expects a deeper recession this year, with its export-dependent economy likely to shrink between 4 and 5 per cent, Prime Minister Najib Razak said on Thursday.
The government had previously forecast the economy to contract 1 per cent in Malaysia's first recession since 1998.
'There are knock-on effects because of worsening external demand. The second half this year should be better. If America and Europe recover, we will be on track in getting a positive growth in the fourth quarter. We expect next year to be positive (growth).'
Said Mr Najib Razak to reporters on Thursday.
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Mr Najib, who is also finance minister, said the government had to revise the figure due to 'very weak external demand' that has hit the country's exports.
Gross domestic product slumped by a sharper-than-expected 6.2 per cent in the first quarter from a year earlier, as exports plummeted 25 per cent and private investment fell 26 per cent, he said. The economy also shrank from the previous quarter, marking its first quarterly contraction in eight years.
Mr Najib said the new GDP forecast was 'realistic' unless the global financial crisis becomes even more protracted.
The central bank has said the economy's slump in the first quarter was largely due to a 17.6 per cent contraction in manufacturing, as electrical and electronics exports plunged amid weak global demand. GDP shrank 7 per cent from the fourth quarter.
Construction was the only sector of the economy to expand in the first quarter, growing 0.6 per cent due to new ommercial and residential developments.
Mr Najib said the government would accelerate the implementation of projects under fiscal stimulus measures totaling RM67 billion (S$27 billion).
He said the government plans to further loosen guidelines for foreign investors under its economic liberalisation plans, but didn't say when this will be announced. Malaysia has recently liberalised part of its services sector to boost the economy.
Mr Najib reiterated that Malaysia's banking sector was 'not only healthy but resilient and flushed with liquidity'.
Moody's Investors Services recently placed nine Malaysian banks on review for possible downgrade of their deposit and debt ratings. -- AP
M'sia faces worse recession
Prime Minister Najib Razak said exports have plummeted by 25 per cent and private investment has fallen by 26 per cent in the first quarter this year, compared to the same period last year. -- PHOTO: REUTERS
PUTRAJAYA (Malaysia) - MALAYSIA expects a deeper recession this year, with its export-dependent economy likely to shrink between 4 and 5 per cent, Prime Minister Najib Razak said on Thursday.
The government had previously forecast the economy to contract 1 per cent in Malaysia's first recession since 1998.
'There are knock-on effects because of worsening external demand. The second half this year should be better. If America and Europe recover, we will be on track in getting a positive growth in the fourth quarter. We expect next year to be positive (growth).'
Said Mr Najib Razak to reporters on Thursday.
... more
Mr Najib, who is also finance minister, said the government had to revise the figure due to 'very weak external demand' that has hit the country's exports.
Gross domestic product slumped by a sharper-than-expected 6.2 per cent in the first quarter from a year earlier, as exports plummeted 25 per cent and private investment fell 26 per cent, he said. The economy also shrank from the previous quarter, marking its first quarterly contraction in eight years.
Mr Najib said the new GDP forecast was 'realistic' unless the global financial crisis becomes even more protracted.
The central bank has said the economy's slump in the first quarter was largely due to a 17.6 per cent contraction in manufacturing, as electrical and electronics exports plunged amid weak global demand. GDP shrank 7 per cent from the fourth quarter.
Construction was the only sector of the economy to expand in the first quarter, growing 0.6 per cent due to new ommercial and residential developments.
Mr Najib said the government would accelerate the implementation of projects under fiscal stimulus measures totaling RM67 billion (S$27 billion).
He said the government plans to further loosen guidelines for foreign investors under its economic liberalisation plans, but didn't say when this will be announced. Malaysia has recently liberalised part of its services sector to boost the economy.
Mr Najib reiterated that Malaysia's banking sector was 'not only healthy but resilient and flushed with liquidity'.
Moody's Investors Services recently placed nine Malaysian banks on review for possible downgrade of their deposit and debt ratings. -- AP
