AFP - Friday, May 29
KUALA LUMPUR (AFP) - - Malaysia's economy is likely to contract by 4.0-5.0 percent this year due to a steep decline in exports and manufacturing, Prime Minister Najib Razak said Thursday.
"We are in a technical recession because of two quarters of negative growth," Najib said a day after the release of data showing the economy shrank by 6.2 percent in the three months to March.
The central bank has said that second-quarter results "will be very similar" to the outcome in the first quarter which saw the economy contract for the first time in nearly eight years.
"The third quarter is going to be a slight negative... but our recovery depends on the recovery of the world economy," Najib told a press conference.
The government had previously predicted the economy would perform in a range of plus or minus 1.0 percent in 2009.
Central bank governor Zeti Akhtar Aziz said Wednesday that a recovery in the exports-dependent economy will gather pace in the second half of the year.
The economy grew by just 0.1 percent in the last quarter of 2008, but the outcome in the first quarter of 2009 was worse than economists had expected.
In March, the government warned the economy could contract despite a massive 16.2-billion-dollar stimulus package.