M’sia economy grew only 0.1%

MALAYSIA'S trade-driven economy grew a dismal 0.1 per cent in the fourth quarter of 2008 from a year earlier, bringing full-year growth to 4.6 per cent, the government said on Friday.

The manufacturing sector was badly hit, contracting by 8.8 per cent in the October-December period after having recorded positive growth for the previous 26 quarters, the Department of Statistics said in a statement.

'The downturn in the global economic activity has the spillover effect on our local economy,' the statement said. Third-quarter gross domestic product growth had been 4.7 per cent.

Falling foreign demand caused double-digit declines in the fourth quarter for some manufacturing industries, including electrical and electronic goods and metal products.

The construction and mining sectors also suffered negative growth, but the services sector – which includes retail trade, insurance and transport – recorded a 5.6 per cent modest rise to be the main contributor to economic growth.

The government has indicated it may revise downward its 2009 growth forecast of 3.5 per cent amid the protracted turmoil in the global economy. Some analysts have predicted Malaysia's economy may contract this year.

The government is expected to announce a second stimulus package, widely expected to be between 10 billion ringgit (S$4.33 billion) and 15 billion ringgit, on March 10. This comes after a 7 billion ringgit stimulus package unveiled in November. — AP