Malaysia Economy Grows 7.2 pct in 2010

KUALA LUMPUR (Bernama) - Malaysia's economy outperformed
expectations to chalk up a commendable growth of 7.2 per cent last year compared
with a contraction of 1.7 per cent in 2009, bolstered by a rebound in
manufacturing and services as well as brisk exports and imports.

The government, which implemented a RM67 billion (US$21.61 million) two
years ago to boost the economy severely affected by the global downturn, had
earlier forecast gross domestic product to grow by more than 6.0 per cent last
year. For this year, growth is expected to be between 5.5 to 6.0 per cent.

However, the continued inflow of foreign direct investments, a healthy
reserves position maintained by the central bank, a record performing ringgit,
as well high commodity prices boosted growth and aided the rebound last year.

Bank Negara Malaysia (Malaysia's central bank) Friday said the economy grew
by 4.8 per cent in the fourth quarter (Q4) from 5.3 per cent in Q3, driven by
domestic demand following higher private and public sector spending.

On the supply side, all economic sectors, with the exception of the primary
sectors, continued to expand during the quarter, the central bank said in a
statement.

Meanwhile, the economy grew 5.3 per cent in the third quarter of 2010, and
was preceded by 8.9 per cent and 10.1 per cent growths, respectively, in the
second and first quarters.

On sectoral basis, manufacturing rebounded significantly by 11.4 per cent in
2010 from a negative 9.4 per cent in 2009, according to the Statistics
Department.

The sector, which accounted for 27.2 per cent to the GDP, grew 6.2 per cent
in the fourth quarter, with petroleum, chemical, rubber and plastic products
sub-sector as the main catalyst in the expansion of the growth.

As for services, the sector accelerated by 6.8 per cent as compared to 2.6
per cent in 2009.

The sector strengthened by 6.2 per cent in Q4 from 5.4 per cent in Q3,
supported mainly by the wholesale and retail trade and business services and
real estate sub-sectors.

For the year, the agricultural sector rose by 1.7 per cent as compared to
0.4 per cent in the previous year, with the final quarter seeing a contraction
of 4.3 per cent attributed by the decline in the oil palm and forestry
sub-sectors.

As for construction, the sector recorded a lower 5.2 per cent growth in 2010
from 5.8 per cent in 2009 with growth in the final quarter picking up by 5.6 per
cent.

The mining and quarrying sector, meanwhile, rebounded a marginal 0.2 per
cent from a negative 3.8 per cent in 2009, with the final quarter seeing a
decline of 1.3 per cent following the fall in the production of crude oil and
condensate.

On the demand side, the department said growth for final consumption
expenditure stepped up 5.3 per cent in 2010 from 1.2 per cent in 2009, while
Gross Fixed Capital Formation turned around to 9.4 per cent from a negative 5.6
per cent in the preceding year.

In 2010, both exports and imports showed a significant growth of 9.8 per
cent and 14.7 per cent, respectively.

Exports grew 1.5 per cent in Q4 supported by the commodity-based products,
namely mineral fuels & lubricants, animal & vegetable oils and fats and
chemicals, while imports rose by 3.3 per cent, driven by intermediate and
capital goods.