Malaysia's economy shrinks 1.2 percent in Q3

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KUALA LUMPUR, Malaysia -Malaysia's economy shrank 1.2 percent in the third quarter, an improvement from the previous two quarters as the financial services and construction sectors gained strength, the government said Friday.

The year-on-year fall in gross domestic product came amid declines in key sectors such as manufacturing, which dropped 8.6 percent, and mining, which slid 3.5 percent, the Department of Statistics said in a statement.

But it was a more moderate contraction compared with the 6.2 percent drop in the first three months of 2009 and 3.9 percent in the second quarter, the statement said.

The government last month narrowed its forecast for the contraction in the economy this year to 3 percent following stimulus measures totaling 67 billion ringgit ($19.7 billion). It earlier expected the economy to shrink 4 percent to 5 percent. For 2010, the government has forecast growth of 2 to 3 percent.

The services sector was the "main impetus" for the better economic performance, expanding 3.4 percent in the third quarter due to increasing finance and insurance activities and retail trade, the department said.

The construction sector grew 7.9 percent, buoyed by stimulus spending on new infrastructure.

Exports and imports both continued a downward spiral.

Exports shrank 13.4 percent amid reduced foreign demand for electrical and electronics products and petroleum goods. Imports contracted 12.9 percent because of lower purchases of intermediate and capital goods.

2009-11-20 05:10:35