Malaysia's growth slows to 0.1pc in Q4

KUALA LUMPUR (AFP) - Malaysia's economic growth slowed to just 0.1 percent in the fourth quarter, hit by falling exports and manufacturing as demand continues to evaporate, according to official data released Friday.
The central bank said the trade-driven economy grew at 4.6 percent over 2008, lower than the government's target of 5.0 percent. Malaysia recorded 6.3 percent growth in 2007.
Bank Negara said the economy was being propped up by domestic demand, which grew at 3.1 percent in the third quarter, and private consumption which grew at 5.3 percent.
"On the supply side the slowdown was across all economic sectors, led by a sharp decline in the manufacturing sector, particularly the export-oriented industries due to the significant contraction in global demand," it said.
The manufacturing sector slipped 8.8 percent in the three months to December, while export-oriented industries slumped 12.3 percent.
The fourth quarter GDP result, which came after 4.7 percent growth in the third quarter, was lower than expectations which had been for an expansion of about 1.0 percent.
Bank Negara said inflation moderated to 5.9 percent in the three months to December, compared to 8.4 percent in the previous quarter, due mostly to a series of fuel price cuts.
"The downward trend in inflation is expected to continue in 2009. Slowing economic growth is expected to contain both supply and demand pressures and rein in domestic price increases," it said.
The central bank has announced an unprecedented three consecutive interest rate cuts, including a cut of 50 basis points to 2.0 percent on Tuesday when it said the troubled global outlook had raised the risk of a recession in 2009.
The government is aiming for 3.5 percent growth for 2009, but OSK has reduced its forecast to a 1.0 percent contraction and said the outlook appeared worse than in the Asian financial crisis of a decade ago.