4.5 PCT GROWTH IN 4TH QUARTER '09 UNEXPECTED, SAYS NAJIB

PUTRAJAYA, Feb 25 (Bernama) -- The Malaysian economy registered 4.5 per cent
growth in the fourth quarter of 2009, amid strengthened domestic and external
demand.

Describing the growth as unexpected, Prime Minister Najib Tun Razak
said for the year 2009, the economy contracted by 1.7 per cent. lower than the
-3 per cent projected earlier.

The economy recorded a contraction in three straight quarters -- 6.2 per
cent
in the first quarter, 3.9 per cent in second quarter and 1.2 per cent in the
third quarter, said Najib, who is also Finance Minister, when announcing the
fourth quarter economic performance Wednesday.

Asked for this year's forecast, Najib said: "We are quite bullish about
this."

On whether the worst was over for the country's economy, he said that it was
over provided that nothing seriously unexpected with respect to the global
economy.

"For example, any major sovereign collapse barring unforeseen circumstances
of that nature, we could safely say that we have recovered from the crisis and
we should be looking forward to a strong growth for 2010."

As to whether the country could achieve 5.0 per cent growth this year, he
said: "Can".

"Earlier forecast is about 4.0 per cent for this year. I'm hoping I can
achieve one or two per cent more than that.

"(We are) Going all out to make sure we are able to generate confidence,
speedy implementation of projects and encourage the private sector to invest
with higher consumer confidence.

"We should make good this year in terms of economic performance." he said.

Najib said the accelerated implementation of the government's two stimulus
packages has been a key factor in contributing to the economic recovery.

To date, over 113,000 projects under the two stimulus packages have and are
being implemented, involving a total value of RM17 billion (US$1=RM3.4).

Of the total, the government has made a payment OF RM13.9 billion, on
average the government has pumped approximately RM1 billion a month into the
market from
January 2009.

“One of the main reasons why our ability to spend about a billion a month in
2009 is because we have this special monitoring unit attached to the Ministry of
Finance.

“It did not exist before but this unit was working flat out and engaging
with
implementing ministries and central agencies to make sure all the programmes
carried out under the two packages are implemented speedily.

“This is one of the main reasons why we have managed to achieve more than
expected in terms of economic growth," he said.

Sustained growth in private consumption expenditure and increased public
sector
spending contributed to higher domestic demand, which recorded a three per cent
growth in the fourth quarter as compared with 0.4 per cent in the third quarter,
said Najib.

He said private consumption growth was supported by better conditions in the
labour market, low inflation rate and higher spending for the year-end school
holiday period and festive season.

The prime minister said the public sector continued its key role of
providing
impetus to growth during the quarter.

Public sector consumption expenditure expanded further by 1.3 per cent while
public sector capital spending increased substantially as the implementation of
projects under the fiscal stimulus packages gained further momentum during the
quarter.

During the quarter, the development expenditure of the Federal Government
amounted to RM17.6 billion, an increase of 9.5 per cent compared with the fourth
quarter of 2008.


Najib said there were emerging signs of stabilisation in private sector
capital
spending in the fourth quarter last year, as business sentiments continued to
improve.

This, together with the higher public sector capital spending, contributed
to
the turnaround in total gross fixed capital formation, which registered a
positive growth of 8.2 per cent during the quarteras compared with
a negative 7.9 per cent growth in the previous quarter.

On the external sector, Najib said Malaysia's exports performance recovered
to
record a positive growth of 5.1 per cent, supported by improvements in external
demand, particularly from regional economies and from stronger commodity prices.

Malaysia also continued to receive foreign direct investments, he said,
adding
that in the fourth quarter of 2009, gross inflows of FDI increased to RM7.2
billion as compared with RM6.7 billion in the third quarter, with investments
mainly in the manufacturing and services sectors.

On the supply side, Najib said all economic sectors recorded improved
performance during ghe fourth quarter.

On the supply side, he said, all economic sectos recorded improved
performance during the quarter.

Activities in the construction sector expanded strongly by 9.2 per cent,
benefiting primarily from the accelerated implementation of projects under the
stimulus packages and the Ninth Malaysia Plan, he said.

Continued progress in the implementation of major infrastructure projects
such as the electrified double-tracking rail project and roads, together with
the construction of low-and medium-cost houses as well as the upgrading and
maintenance of schools and hospitals contributed to the strong performance of
the construction sector, he said.

Najib said growth in the services sector was broad-based, with allmost all
sub-sectors recording higher growth rates.

The manufacturing sector recovered to register a positive growth of 5.3 per
cent, reflecting the improvement in both external and domestic demand, he added.


-- BERNAMA