MSIA`S GDP Q2 CONTRACTS 3.9 PCT

KUALA LUMPUR, Aug 26 (Bernama) -- Malaysia's Gross Domestic Product (GDP)
growth in the second quarter of 2009 contracted 3.9 per cent compared with a
6.2 per cent decline in the first quarter.

This brings the GDP growth for the first half of this year to minus 5.1 per
cent.

Central Bank of Malaysia's Governor, Dr Zeti Akhtar Aziz, in announcing
the GDP figures attributed the smaller contraction to higher public spending and
positive growth in private consumption.

Based on the preceding quarter, real GDP recorded a positive growth of 4.8
per cent compared with the first quarter of this year, she said at a press
conference to announce the country's economic performance today.

During the quarter, Zeti said domestic demand registered a slower decline of
2.3 per cent following expansion in both public and private sector spending.

Zeti added that private consumption recorded a positive growth of 0.5 per
cent as labour market conditions stabilised while lower price levels provided
further support to consumer spending.
" This trend has been reinforced by the continuous access to financing while
consumer sentiment also improved in the second quarter. We look at the consumer
confidence index which increased to 105.8 points from 78.9 points in the
previous quarter," she said.

The governor said public consumption expanded by one per cent due to higher
expenditure on supplies and services and emoluments.

Meanwhile, elaborating on the demand side, the Statistics Department said
private final consumption expenditure registered a turnaround by expanding 0.5
per cent after decreasing 0.7 per cent in the last quarter.

On the supply side, growth was contributed by the services, construction and
agriculture sectors.


The department said the external sector continued to register a negative
momentum in the second quarter as exports declined 17.3 per cent while imports
recorded a smaller contraction of 19.7 per cent.

It said exports continued to be subdued due to the sluggish external demand
but the improvment in imports was supported by the slight increase in domestic
demand.

Final consumption expenditure grew 0.6 per cent, after contracting 0.2 per
cent in the first quarter, as the government's consumption expenditure
increased 1.0 per cent in the said quarter.

The department also said gross fixed capital formation declined 9.8 per cent
compared with a negative 10.8 per cent in the previous quarter.

On the supply side, the manufacturing sector fell 14.5 per cent for the
quarter under review, against a contraction of 17.9 per cent previously, with
electric and electronic products registering a decline of 27.3 per cent.

The services sector, in turn, showed a turnaround from a negative 0.2 per
cent to an increase of 1.6 per cent due to improvements in most services
sub-sectors except for transport & storage and utilities.

The agriculture sector grew 0.3 per cent compared with a negative growth of
4.3 per cent in the preceding quarter while construction expanded 2.8 per cent
from an increase of 1.1 per cent in the first quarter.

--BERNAMA