Malaysia: Economy slows in last quarter of 2011
February 15, 2012
Economic growth moderated in the fourth quarter, mainly due to cooling external demand, while domestic activity remained resilient. In the last quarter of 2011, GDP grew 5.2% over the same period the previous year, which fell short of the 5.8% expansion recorded in the third quarter but overshot the 4.8% rise expected by the market. Domestic demand improved markedly by expanding 7.5% (Q3: +4.8% year-on-year). Public spending continued to grow strongly and expanded 23.6% (Q3: +21.7% yoy), while private consumption moderated somewhat to a 7.1% rise (Q3: +7.3% yoy). Moreover, gross fixed investment accelerated further from a 6.1% increase in the third quarter to an 8.5% expansion in the fourth. On the external front, a mild increase in exports was more than offset by a noticeable jump in imports. Exports grew 4.9% in the fourth quarter, slightly up from the 4.2% increase recorded in the previous quarter, while imports accelerated to a 7.0% expansion (Q3: +3.2% yoy). As a result, the external sector's net contribution to overall growth swung from plus 1.3 percentage points in the third quarter to minus 1.8 percentage points in the fourth. In the full year 2011, GDP increased 5.1%, which was well below the 7.2% expansion tallied in 2010 but broadly in line with market expectations of a 5.0% increase. According to the 2012 Budget, the government sees the economy expanding between 5.0% and 6.0% this year.