Malaysia's 4th Quarter GDP Growth Positive

PUTRAJAYA, Jan 12 (Bernama) -- Early indications show that Malaysia will announce positive gross domestic product (GDP) growth for the fourth quarter of 2009, Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop said.

"How positive, I am not sure yet. Certainly it will be positive," he told reporters after the signing of a memorandum of understanding between the government and Oxford Business Group on "The Report: Malaysia 2010" here on Tuesday.

He also said the Economic Planning Unit that he is in charge of, was confident that the country would achieve more than five percent GDP growth for this year.

The government has projected a contraction of 3.0 per cent in GDP for 2009 after the first, second and third quarters showed negative growth of 6.2 per cent, 3.9 per cent and 1.2 per cent respectively.

Nor Mohamed said some of the positive indications included the clear trend of resumption of recruitment in the manufacturing sector and better corporate earnings.

"There is also very strong evidence that there is higher demand for electronic chips recently from the rapid expansion of the automotive industry in China and India.

"Advances in demand for a new generation of telecommunication devices were also seen," he said.

Besides that, Nor Mohamed said, the rising demand and short-term supply constraints had put an upward pressure on oil, rubber and palm oil.

"We are the winner on that sense as we are the largest producer," he said.

Passenger car sales had also picked up, rising to 40,569 in November last year from 36,254 in the same month a year before.

Loan application on a yearly basis had improved by 37.5 per cent in October last year while loan approval increased by 25 per cent.

Accordingly, Nor Mohamed said, the economic recovery was also expected to be faster this year.

"The multiplier from the RM67 stimulus packages will start cascading down this year," he said.

"Many evidences show 2010 is going to be a good year. Early days yet but the indication is quiet positive."

Whether the current strong stock market performance could be sustained, Nor Mohamed said: "Based on corporate earnings reports, the stock market seems to be in a sustainable phase and confident mood.

"The stock market reflects the underlying confidence that the investing public has on the government's proactive economic measures.

"As the domestic economic front is going to be positive, the stock market should do well," he added.

The market capitalisation of listed companies on Bursa Malaysia breached the RM1 trillion mark on Jan 5. Its all-time high was RM1.1 trillion, recorded in the early part of 2007 before the start of the global financial crisis.

Asked whether the reported attack on churches would affect investor sentiment, Nor Mohamed said: "Most investors who know us will realise that we are a united and tolerant country.

"I don’t think this should have too much negative long-term effect."