Malaysian Economy

Topics: Inflation, Monetary policy, Macroeconomics Pages: 3 (890 words) Published: November 1, 2010
Author Fintan Ng article “Economy Expands More Than Expected in Q4” emphasizes that the economy grew at a faster pace in the fourth quarter because of superb combination of fiscal policy both from government expenditure and low inflation rate that boost domestic demand. The application of monetary policy also play major role in expanding the economy. GDP (Gross Domestic Product) boosted to 4.5% in the Q4 after 3 consecutive quarters of contractions. Economists expectation for an average growth of 3.2% has gone beyond par as the GDP expand to 4.5% this quarter. Besides that, economic research head from CIMB Investment Bank Bhd, Lee Heng Gue states to Starbiz that there would be an increase in GDP for the year 2010 as a result from an expansion in the services and manufacturing sectors. Furthermore, the economy growth momentum would continue because of positive global environment supports with the strengthening of intra-Asia trade that however eventually shields the economy in the region from slowing down. Basically all of our major sectors (manufacturing, agriculture, manufacturing and service) shown positive increase in the percentage of pace except in the mining field where it declines from 3.5% in the 3rd quarter to minus 2.8% because of the fall of condensate and crude oil. Bank Islam Malaysia Bhd chief economist Azrul Azwar states that the rate of growth would most likely continue into the first half of 2010 but could slow down after that as global recovery was affected by the unwinding of stimulus measures. He also mention that when the unwinding begins, there may be questions over how sustainable growth can be while the stubbornly high unemployment in the US and the euro-zone will translate to weak consumer demand that will affect Asia’s manufacturers. RHB Research Institute Sdn Bhd economist Peck Boon Soon also mention that any recovery in jobs in the developed economies, crucial to export-reliant economies in Asia, would be gradual. Data on the Q4 GDP...
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