GROWTH EXPECTED IN Q4, SAYS CENTRAL BANK GOVERNOR

KUALA LUMPUR, Aug 27 (Bernama) -- The Malaysian economy is expected to
recover in the fourth quarter of this year as domestic consumption shows signs
of improvement, Malaysia's Central Bank Governor, Dr Zeti Akhtar Aziz said
Wednesday.

" We expect the third quarter to show further improvement. This means the
pace of decline will be less and we expect the fourth quarter to see positive
growth as domestic demand gains further momentum in the second half of the
year," she told reporters here after announcing the country's economic
performance for second quarter 2009.

Domestic demand accounted for 88 per cent of GDP while external demand
contributed 12 per cent of the growth.

"This shows that our domestic economy is becoming more balance. We do not
want to be over reliant on the external sector. In fact, this has been a
significant development since 2003, the domestic demand is emerging as an
important driver of growth.

" However, we are not going to become a close economy, the export sector
will still remain important," Zeti added.

The governor said in order for the domestic economy to further improve,
there must be a recovery in domestic demand followed by improvements in labour
market conditions as well as business and consumer sentiment.

" The acceleration of the RM67 billion fiscal stimulus, lower inflation,
continued access to financing and the accomodative monetary environment will
also provide further support to domestic demand.

" We have also seen some improvement in the commodity sector and this will
support demand in the second half," she added.

Asked whether the country would face a double dip recession, Zeti said,
Malaysia like other Asian economies was not facing a financial sector
crisis.

" Our financial sector is solid and sound as we have seen in our growth
numbers in the second quarter and the continued access to financing will help to
support the economy," she said.

On the fiscal deficit, Zeti said the government has the capacity, at this
point in time, because of its low level of indebtedness.

" Obviously, this capacity will prevail for this year and next year.

" But, we want to see private sector recovery as the government's
participation in the economy should always be temporary," she added.
-- BERNAMA