[ Laman Ehwal Semasa ReformIS ]
Date: 26 Aug 1999
Time: 01:27:34
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Malaysia's domestic demand still weak despite renewed GDP growth
KUALA LUMPUR, Aug 25 (AFP) - Malaysia's economic performance lags other Asian countries with domestic demand still weak despite a rebound in gross domestic product (GDP) in the June quarter, economists said Wednesday.
"We are a far cry from South Korea which saw a second-quarter GDP performance that surpassed 9.0 percent," an economist with a local brokerage told AFX-Asia, an AFP-affiliated financial news service.
Malaysia's central bank said earlier Wednesday that GDP grew 4.1 percent in the June quarter, reversing five consecutive quarters of shrinking activity.
The economist, who asked not to be named, said Malaysia's growth still hinged largely on exports and public spending whereas domestic demand had picked up strongly in South Korea.
While domestic consumption has improved, it still needs to rise further before the overhang in the property sector can be cleared, he said. The construction sector would continue to be a drag at least until the end of the year.
The economist also said that efforts to force mergers among Malaysian financial institutions had created unease among employees. "They certainly are not going to spend if they think their jobs are on the line."
Another economist with a local brokerage said the June data was "reasonable" but agreed that Malaysia was falling behind other economies in Asia.
"We are definitely lagging behind some of the regional economies, especially South Korea, but based on what we have done, I think this is a reasonable achievement," the economist said.
The figures showed that private consumption grew 3.0 percent from a year earlier, reversing a 4.1 percent contraction in the March quarter. Public consumption was up 8.7 percent, down from the 22.4 percent surge during the previous three months.