Pen. No.: 11/09/06
EMBARGO: Not for publication or
broadcast before 1800 hours on
Friday, 20 November 2009
ECONOMIC AND FINANCIAL DEVELOPMENTS IN MALAYSIA
IN THE THIRD QUARTER OF 2009
OVERVIEW
Pace of recovery gathering momentum in the third quarter
The Malaysian economy registered an improvement in the third quarter with a
reduced contraction of 1.2% in the third quarter of 2009 (2Q 09: -3.9%) amidst
positive growth in domestic demand and stabilisation of external demand.
The growth impetus emanated mainly from domestic demand, as a result of
stronger private consumption and higher public sector spending.
Improvements in the global economy, particularly the regional economies,
helped to stabilise the external sector. On the supply side, all economic
sectors, except agriculture, recorded improved performance.
-1.2
-3.9
0
20
40
60
80
100
120
140
160
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
RM bil
-8
-6
-4
-2
0
2
4
6
8
10
Annual
change (%)
2005
2006
2007
2008
Source: Department of Statistics, Malaysia
2009
Further improvement in the third quarter
(at constant 2000 prices)
2
During the quarter, domestic demand turned around to expand by 0.4% (2Q
09: -2.2%), led by stronger growth in private consumption and public sector
spending. Private consumption, which grew by 1.5% (2Q 09: 0.5%), was
supported by improved labour market conditions, lower price levels and higher
spending for the festive season. Consumer sentiments remained positive in
the third quarter as reflected by the MIER Consumer Sentiments Index which
was above the 100-point threshold. The public sector continued to provide
support to the economy, where public consumption expanded by 10.9% (2Q
09: 1%), following higher expenditure on emoluments while public
development expenditure remained strong and was channelled mainly into
rural development, education and the transportation sector. The strong public
investment provided support to gross fixed capital formation, which co