M'SIA'S 8.9 PCT GDP GROWTH STRONGR THAN EXPECTED, SAYS ECONOMISTS

By Massita Ahmad

PUTRAJAYA, Aug 18 (Bernama) -- The 8.9 per cent Gross Domestic Product (GDP)
growth recorded in the second-quarter is above market expectations, economists
said Wednesday.

"It is above our estimate of 8.5 per cent. This translates into a 9.5
per cent growth in the first-half.

"Even if the second-half performance moderates to around 6.0 per cent, the
full-year growth could still come close to our forecast of 8.0 per cent for
2010.

"Therefore, we are not changing our bullish view on the economy, especially
given the new growth drivers from the New Economy Model and the 10th Malaysia
Plan," said AmResearch economist Manokaran Mottain.

He told Bernama Wednesday that robust domestic demand and sustained steady
performance in trade activity would further boost economic growth.

Malaysia's central bank Bank Negara Malaysia Wednesday announced an 8.0 per
cent GDP growth for the second-quarter, which was lower than the first-quarter
growth of 10.1 per cent.

AmResearch had forecast Malaysia's second-quarter GDP to remain strong at
8.5 per cent, despite some weaknesses.

The research house recognised the slower growth of 9.4 per cent in June's
Industrial Production Index against the consensus estimate of 11.7 per cent.

However, manufacturing activity was still stronger in the second-quarter,
posting an increase of 15.6 per cent versus 5.3 per cent recorded in the
first-quarter.

This, it said was in tandem with regional performances, especially with the
country's major trading partners like China and Singapore.

Meanwhile, Muhammad Saleh Majid said the latest data was a respectable
figure the country can be proud of.

"We are growing in tandem with Singapore and China which are moderating
their economic growths so as not to reach an over-heated situation.

The former president of Bursa Saham Kuala Lumpur (Malaysian stock exchange),
now known as Bursa Malaysia, also said the lower growth, when compared with the
first quarter growth of 10.1 per cent, was expected.

"We managed to remain resilient because of the RM67 billion (US$21
billion)stimulus package which still had a positive impact on the economy," he
said, adding that the lower growth was due to external factors.

Muhammad Saleh said several developed countries, which were Malaysia's
trading partners, were still reeling from the recession.

"The United States is still not out of the economic crisis and Japan is
still trying to cope with the rising yen which was affecting exports.

"We are still safe. We did not experience an economic downfall like other
developing countries," he added.
-- BERNAMA


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