Malaysia’s growth slows to 4%

The Myanmar Times - - Business -

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

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