Malaysia's Q2 GDP Reflects Economic Resilience, Strong Fundamentals

KUALA LUMPUR, Aug 13 (Bernama) -- Malaysia is on the right track to achieve a gross domestic product (GDP) of between four and 4.5 per cent in 2016 following the second quarter (Q2) growth of 4.0 per cent, in line with moderate growth among major trading partners. Minister in the Prime Minister's Department Abdul Rahman Dahlan said the growth reflected the country's economic resilience, while the economic fundamentals remained strong. "Although the development projects are still continuing, the government will ensure that measures to optimise public spending are being implemented so that the fiscal target is met," he said in a statement Friday. Malaysia's cenral bank Bank Negara Malaysia on Friday announced the country's economy grew 4.0 per cent in the second quarter of 2016 compared with 4.2 per cent in the first quarter, driven mainly by domestic demand, private consumption and investment. Abdul Rahman said several measures would be taken to further strengthen economic resilience and sustain economic growth. These include empowering small and medium enterprises, allocating funds for capacity building and technology upgrades, and providing tax exemptions to encourage exports. He said infrastructure improvements would also be implemented, including the public transportation system, telecommunications and rural infrastructure, roads and electricity supply, as well as improving social facilities. Apart from agricultural economic activities, which will also continue to be upgraded and strengthened, including automation and mechanisation, developing young agropreneurs and improving infrastructure. "For exports, funds will be made available to promote Malaysian products and exports of services," he said. Abdul Rahman said with sustainable economic growth, the average income of the people had increased to RM36,675 (US$9,168) in the second quarter, a two per cent increase or more RM700 (US$75), from the same quarter a year ago. Meanwhile, he said Malaysia remains optimistic despite some risks to economic growth due to low oil prices, uncertainty of growth prospects in the Eurozone, and policy uncertainty in developed countries. "The country could still face other risks as its economic base has been diversified and this has also been recognised by international rating agencies," he said. In addition, the government has taken pre-emptive measures since early this year to cushion the economy from the effects of these uncertainties. For example, he said the interest rate reduction recently would continue to support domestic demand and ease the burden of the people. Abdul Rahman said other initiatives introduced by the government to help the people offset the cost of living, included handing out RM500 (US$125) 'duit raya' to Felda settlers and civil servants and the 1Malaysia Special Assistance (BR1M), as well as increased the minimum wage in the private sector to RM1,000 (US$250). In addition, the government will continue to build affordable housing, add more 1Malaysia grocery stores, offering essential goods at reasonable prices, and 1Malaysia clinics. The government will also increase the number of marketing outlets of agricultural products such as agrobazaar and MyFarm outlets which offer goods directly from farms to consumers at low prices, he added. -- BERNAMA