Team Northport > February Bulletin 2

Malaysian economy records 6.3 % growth

The Malaysian economy grew 6.3 per cent in 2007. The fourth quarter real gross domestic product (GDP) was up strong at 7.3 per cent, compared with 5.7 per cent, in the corresponding quarter in 2006, supported by expansion in all sectors.

The strong performance of the Malaysian economy was driven by the robust domestic demand, through strong private consumption and investment activities said Bank Negara Malaysia. Domestic demand grew 9.8 per cent in 4th quarter on the back of a high 11.1 per cent increase in private consumption, attributable to the higher disposal income, brought about by the rising commodity prices, salary increment in the public service and the stable employment situation.

Gross investments in fixed assets also grew 11 per cent due to higher private investments as well as increased Government spending on various development activities including upgrading public utilities and transportation infrastructure.

The manufacturing sector grew 5.6 per cent in 4th quarter as compared with 4 per cent in the same quarter in 2006, supported by expansion in the domestic-oriented industries. Output of the domestic-oriented industries expanded 11.1 per cent due to higher demand in the transport equipment; food and beverages and the building materials industries. There was also improvement in the production of export-oriented industries, attributable to the better performance in the electrical and electronic industry in particular computers and peripherals.

The services sector which remained as the prime contributor to the GDP growth, added 9.1 per cent in 4th quarter, up from the 8.0 per cent recorded in the same period in 2006, supported by double-digit growth in the wholesale and retail trade, accommodation and restaurant; finance, insurance, real estate and business services. The construction sector grew 4.7 per cent in 4th quarter due to activities in the civil engineering and non-residential sub-sectors.

The agriculture and mining sectors also recorded strong growth in 4th quarter of 6.9 per cent and 3.5 per cent respectively. The higher agriculture production was mainly due to higher crude palm oil output from better yields as well as an increase in livestock output. Production of crude oil also increased 7.2 per cent due to higher production in the Kikeh deepwater oil fields.