Malaysian economy shrank 6.2% in 1st quarter

Malaysia's gross domestic product (GDP) contracted by 6.2 per cent in the first quarter of this year compared with the same period last year, according to the governor of the country's central bank.     

The contraction came after the 0.1 per cent growth recorded for the last quarter of 2008, said Bank Negara Malaysia's governor Dr Zeti Akhtar Aziz, adding that the contraction would continue in the current second quarter although the prognosis for improved economic conditions looked brighter in the second half of the year.     

Announcing the first quarter GDP figures at a media conference here yesterday, she attributed the contraction to the significant deterioration in external demand following the deepening recession in advanced economies.     

 

"Export demand continues to be weak and the environment is still challenging. Despite early signs of improvement, Q2 will be similar to Q1.  However, economic conditions are expected to improve in the second half of this year, supported by fiscal stimulus measures and enhancing access to financing," said Dr Zeti.     

"Malaysia is expected to see a significant improvement in the third quarter this year and a higher degree of positive growth in the fourth quarter that would continue into next year." However, she cautioned: "There will be improvement, but it will also depend on both the external and domestic environment as well."