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PM: Malaysia’s GDP grew 4.5% in 4Q

KUALA LUMPUR: Malaysia has emerged from the recession with the Prime Minister announcing the country's economy grew at 4.5% in the fourth quarter of 2009, underpinned by the services, manufacturing and agriculture sector.

The outlook for Malaysia in 2010 remains bullish and Datuk Seri Najib Razak is hoping to achieve higher GDP growth than earlier expected.

"The earlier forecast was 4% for this year but I'm hoping we can achieve 1% or 2% more," he said, after announcing Malaysia's fourth quarter performance.

The economy, measured by the gross domestic product (GDP), contracted 1.7% in 2009. The GDP shrank 1.2% in the third quarter. However, the implementation of the fiscal stimulus measures had gained further momentum during the quarter, providing an additional impetus to growth.

Malaysia's export performance benefited from improvements in external demand, particularly from the regional economies, and from stronger commodity prices. On the supply side, all economic sectors recorded positive growth, with the exception of the mining sector.

According to a Bank Negara Malaysia statement, the overnight policy rate was left unchanged at 2% in the fourth quarter. Interbank rates for all maturities were relatively stable during the quarter.

In terms of lending rates, the average base lending rate (BLR) remained unchanged from the previous quarter, while the average lending rate (ALR) continued decreasing to a historic low of 4.83% in December 2009.

On the supply side, all economic sectors registered improved performance during the quarter.

In the services sector, growth was higher at 5.1% (3Q 09: 3.4%), driven primarily by strong performance in the finance and insurance, wholesale and retail trade, and real estate and business services sub-sectors.

The manufacturing sector recovered to record a positive growth of 5.3% during the quarter (3Q 09: -8.6%), reflecting improvements in both external and domestic demand.

The construction sector expanded further by 9.2% (3Q 09: 7.9%), supported mainly by the continued progress in the implementation of projects under the stimulus packages.

Growth in the agriculture sector was driven mainly by higher production of industrial crops, while the mining sector contracted at a slower pace due to lower production of crude oil.

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