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Thursday, February 27, 2014

TO THE SOOTHSAYERS OF DOOM

By SALLEH SAID KERUAK

In the fourth quarter of 2013, Malaysia’s economy accelerated to an annual GDP growth rate of 5.1%, the fastest pace in the last four quarters, supported by private sector demand and an improvement in exports. In comparison, Singapore’s GDP growth rate for the fourth quarter of 2013 was 0.3% and the annual growth rate was 6.1%.

Private consumption growth remained high in the fourth quarter, although the pace of expansion moderated (7.3% from 8.2% in the previous quarter). Household spending continued to be supported by stable employment conditions and sustained wage growth, especially in the domestic-oriented sectors. Growth in public consumption moderated to 5.1%, reflecting lower government spending on emoluments. 

Gross fixed capital formation grew by 5.8%, led by robust private sector capital spending amidst a contraction in public investment growth. Growth in private investment improved to 16.5% on account of higher capital spending in the services and manufacturing sectors. Public investment declined by 2.7% reflecting moderating capital spending by the public enterprises amid a smaller contraction in Federal Government development expenditure.

Both exports and imports grew at a faster pace (2.9% and 4.4% respectively), largely reflecting the improvement in the global economy and the sustained expansion of domestic demand respectively.

On a quarter-on-quarter seasonally adjusted basis, the economy advanced 2.1%. For the year 2013, the GDP grew by 4.7%.

In 2003, when Tun Abdullah Ahmad Badawi took over as Prime Minister, Malaysia’s GDP growth rate was just over 6%. By the time Tun Abdullah retired, the GDP growth rate was negative or minus 6%.

By 2010, less than a year after Datuk Seri Najib Tun Razak took over as Prime Minister, Malaysia’s GDP growth rate had shot up to more than 10%. In 2011 it stabilised at 5%, until now.

The opposition and soothsayers of doom are telling Malaysians that the country is going bankrupt. The statistics, however, prove otherwise.

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