Najib: Economy on track for recovery

Published: 2009/08/27

Malaysian Prime Minister Najib Razak said today the economy has “turned around a corner” and is on track for a recovery despite a second consecutive quarter of negative growth.The central bank said yesterday that Malaysia’s export-dependent economy shrank 3.9 per cent in the three months to June year-on-year, in an improved performance from the 6.2 per cent contraction seen in the first quarter.

Bank Negara credited higher public spending and positive growth in private consumption for the slowing rate of contraction.“I’m pleased in the sense that I think the worst is over, I think we’ve turned around a corner,” Najib told reporters.

Although the country is now in a technical recession, Bank Negara said it expected the economy to improve in the second half of the year, supported by “a recovery in domestic demand following improvements in labour market conditions, as well as business and consumer sentiments.”

Najib, who is also finance minister, said the government’s two stimulus packages, the most recent in March worth some RM60 billion (US$16.8 billion), had helped bolster the economy.“The two packages which we have announced contributed to the improved performance of the Malaysian economy and it looks like we are on track in terms of recovery,” he added.

The government has said the export-dependent economy is likely to contract by 4.0-5.0 per cent this year due to the drop-off in exports and manufacturing caused by the global economic slump.Foreign investment has also seen a big dip this year, as foreign direct investment for the first five months stood at RM4.2 billion compared to RM46 billion in 2008. -- AFP