Thursday, February 23, 2006

Malaysia Economy Grew 5.3% In 2005.

Malaysia's economy recorded an expansion of 5.3% last year, a slower growth from the previous year's annual gross domestic product [GDP] growth of 7.1%.

The Department of Statistics, which released the fourth-quarter 2005 gross domestic product [GDP] data, said value-added in the manufacturing sector recorded the highest growth of 7.3 per cent in the fourth quarter, surpassing that in the previous quarters.

The manufacturing sector posted a relatively high growth rate of 7.3% against 5.7%, 3.1% and 3.5% in the previous three quarters respectively. This was achieved in tandem with the rebound in the electrical and electronics [E&E] industry.

The services sector moderated to 6 per cent growth in the fourth quarter, after registering a strong growth of 7.3 per cent in the previous quarter. For the whole year, the services sector sustained its growth of 6.5 per cent, with the highest growth recorded by government services, followed by the wholesale and retail trade, and hotels and restaurants sub-sector.

The data was slightly below market expectations and a Business Times poll of economists, which expected the fourth quarter to grow at 5.6 per cent and 2005 to register 5.37 per cent growth.

The agriculture sector recorded negative growth of 1.1 per cent in the fourth quarter, attributed mainly to the decline in oil palm production by 6 per cent. The sector registered an increase of 2.1 per cent in real terms for 2005.

The construction sector which continued to contract by 0.6 per cent this quarter, showed a slight improvement although it shrank by 1.6 per cent for the whole year.

Mining declined in the fourth quarter by 2 per cent as the production of crude oil, condensate and natural gas registered negative growth, lending the sector a 0.8 per cent growth.

The manufacturing's continued performance, especially in the E&E sector, may be affected based on industry indicators from the US. Manufacturing's strong performance to be sustained in the first half of the year.

The external sector registered a significant growth in the fourth quarter, with exports growing by 10.4 per cent and imports expanding by 8 per cent.

On the final consumption expenditure, the Department of Statistics said public consumption expenditure contributed a 12.8 per cent growth while private consumption expenditure grew by 9 per cent.

Meanwhile, Bank Negara Malaysia said that international reserves amounted to RM270.4 billion, or equivalent to US$71.6 billion, as at February 15, sufficient to finance 7.7 months of retained imports and 6.7 times the short-term external debt.

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