Posted on 21 May 2009
[PICTURE1]
Economists said the slower rate of growth was inevitable as the economy expanded at a slower pace last year compared with 2007, which saw a gross domestic product (GDP) growth of 6.3%.
International Trade and Industry Minister Datuk Mustapa Mohamed said in a speech yesterday that the growth was "broad-based" and in tandem with last year's GDP growth of 4.6%.
He was at the Malaysia Productivity Corp's (MPC) 2008 award ceremony for excellence in productivity management, which also saw the launch of the Productivity Report 2008.
The report showed services grew 3.3% on commendable growth in the transport (4.5%), trade (4.3%) and finance (4.2%) sub-sectors while manufacturing grew 2.0%, supported by growth among domestic-oriented industries. Agriculture grew 3.1%, mainly attributed to efficient production of primary products and attractive palm oil and rubber prices.
Bank Islam Malaysia Bhd (BIMB) senior economist Azrul Azwar said he expected even slower productivity growth this year due to the contraction in GDP growth. He forecast the economy to contract 2.1% this year.
RHB Research Institute Sdn Bhd economist Peck Boon Soon said it was inevitable that productivity growth slowed last year. "Things were already slowing down for the manufacturing sector in late 2008 following the financial crisis," he said.
"We can expect productivity growth to be flat this year or the best that can be achieved is below 1% growth. It makes sense because we saw a slowdown (in the economy) last year," Azrul told StarBiz.
He said the Government would most likely revise down the forecast for productivity growth soon due to a contraction in the economy.
According to the MPC report's outlook for 2009, "the economy is expected to achieve a productivity growth of more than 1.0%" with the services and manufacturing sectors driving growth.
"Domestic industries will assume a greater role in driving economic growth as the export-oriented industries are expected to face greater challenges due to weak external demand," it said adding that the manufacturing sector as a consequence, would achieve a productivity growth of more than 1.0%.
The MPC forecasts the services sector to achieve a productivity growth of more than 2.8% – propped up by the finance, trade and transport sub-sectors – while the construction sector more than 1% as a result of the implementation of the Government's two stimulus packages and the Ninth Malaysia Plan.
