News Room - Business/Economics

Posted on 16 Oct 2008

Malaysia economy may grow 3.4pc in 2009

MALAYSIA'S economy may grow at the slowest pace in eight years in 2009 as the global financial turmoil triggers a worldwide economic slowdown, the Malaysian Institute of Economic Research said.

Southeast Asia's third-largest economy may expand 3.4 per cent in 2009 after growing 5.3 per cent this year, the institute said in a report in Kuala Lumpur today.

The economic think-tank also said Malaysia's budget deficit may exceed 5 per cent of GDP in 2008.

"It is likely that growth would deteriorate in late 2008, as the Malaysian economy takes the hit from the knock-on effects of a flagging global economy," the partially government-funded research institute said in a statement. The outlook for the global economy is "turning increasingly dismal," MIER said.

Demand for made-in-Asia exports is weakening as growth in the region's biggest markets in the US, Europe and Japan slows amid a global financial crisis. The International Monetary Fund last week forecast the world's advanced economies will expand next year at the weakest pace since 1982.

Malaysia's central bank said this week it's ready to shift focus to boosting economic growth as inflation worries ease, forecasting the nation's economy may expand as little as 4 per cent in 2009.

Economic growth will probably be between 5 per cent and 5.5 per cent this year, below the official 2008 forecast of 5.7 per cent, Governor Tan Sri Dr Zeti Akhtar Aziz said in an interview.