Malaysia’s growth slows to 4%
MALAYSIA’S economic growth eased in the second quarter, the central bank said, attributing the slowdown to a decline in exports amid subdued global demand.
The economy grew 4 percent in the April to June period, compared with 4.2pc in the first quarter and 4.9pc in the second quarter of 2015.
It is Malaysia’s slowest rate of expansion since a 1.1pc contraction in the third quarter of 2009 during the global financial crisis.
Energy-exporting Malaysia has the third-largest economy in Southeast Asia, but has been grappling with falling oil prices and weak overseas demand – denting revenues and putting severe pressure on the ringgit.
The country has also been rocked by a massive financial scandal amid allegations that billions of dollars were stolen from a state investment fund founded and overseen by the prime minister.
In July, Malaysia unexpectedly cut interest rates for the first time in seven years.
The decision to slash borrowing costs by 25 basis points to 3pc follows similar moves by Singapore and Indonesia and comes as major central banks around the world look to ease monetary policy to kickstart growth.
The central bank said growth of the economy was expected to be 4-4.5pc for 2016 – its slowest rate in seven years.
Kenanga Research economist Wan Suhaimi Saidi said there could be “modest growth” in the second half of 2016 following the recent cut in the benchmark overnight policy rate.
“The second quarter growth within expectation,” he said.
He added however that he did not expect any strong recovery in commodity and oil prices, which are vital foreign exchange earnings for Malaysia and forecasted full year growth at 4.3pc. – is