KUALA LUMPUR: Malaysia's economy grew at a slower pace of 4.0% in the second quarter ended June 30, 2011 from 4.9% in the first quarter, weighed down by the manufacturing sector following a weaker external environment.
Bank Negara Malaysia said on Wednesday, Aug 17 the manufacturing sector was impacted by the overall weakness in the advanced economies and the disruptions in the global manufacturing supply chain due to the disaster in Japan.
'Nevertheless, overall growth continued to be underpinned by the sustained expansion of private domestic demand. This was further supported by the strong exports of commodities and resource-based products given the favourable regional demand and high commodity prices,' it said.
On the supply side, growth in most economic sectors moderated during the quarter.
BNM said the manufacturing sector slowed to 2.1% (1Q11: 5.5%) but the services sector was sustained at 6.3% (1Q 11: 6.4%), supported by continued domestic private sector spending.
However, the agriculture sector expanded by 6.9% (1Q11: -0.2%), underpinned by'' higher output of crude palm oil and natural rubber as weather conditions improved.
The CONSTRUCTION [] sector expanded a much slower pace of only 0.6% (1Q11: 3.8%) as infrastructure projects were delayed.
The mining sector contracted at a faster pace of -9.2% (1Q11: -4.2%), following lower production of crude oil as production facilities shut down for maintenance.
BNM said on the demand side, domestic demand showed a slower increase of 5.2% (1Q11: 6.9%), mainly due to sustained growth in private sector spending.
As for private consumption, it increased by 6.4% (1Q11: 6.7%).
Sustained expenditure on emoluments and supplies and services supported the growth in public consumption (4.0%; 1Q 11: 8.9%).
However, growth in gross fixed capital formation moderated to 3.2% (1Q11: 6.5%) which was mainly due to lower public investment.
As for private capital spending, it was sustained by expansion in production capacity. It was also supported by investment in new growth areas in the manufacturing sector as well as exploration and development activity in the oil and gas sector.
BNM noted that in 2Q11, Federal Government development expenditure was lower.
On a cash basis, both gross and net inflows of foreign direct investment were higher at RM13.4 billion and RM6.2 billion respectively (1Q11: +RM7.6 billion and +RM4 billion respectively).
The inflows were broad-based and channelled mainly into the finance, insurance and business services sub-sector, manufacturing and oil and gas sectors.
Direct investment abroad by Malaysian companies recorded a larger net outflow of RM9.4 billion (1Q 11: -RM3.7 billion).
These investments were largely undertaken by companies in the finance and insurance, business services and communications sub-sectors.
"Net inflows of portfolio investment also increased to RM37.6 billion (1Q 11: +RM8.1 billion), reflecting the strong foreign interests in the domestic capital market, particularly the debt securities markets," it said.
Bank Negara Malaysia said on Wednesday, Aug 17 the manufacturing sector was impacted by the overall weakness in the advanced economies and the disruptions in the global manufacturing supply chain due to the disaster in Japan.
'Nevertheless, overall growth continued to be underpinned by the sustained expansion of private domestic demand. This was further supported by the strong exports of commodities and resource-based products given the favourable regional demand and high commodity prices,' it said.
On the supply side, growth in most economic sectors moderated during the quarter.
BNM said the manufacturing sector slowed to 2.1% (1Q11: 5.5%) but the services sector was sustained at 6.3% (1Q 11: 6.4%), supported by continued domestic private sector spending.
However, the agriculture sector expanded by 6.9% (1Q11: -0.2%), underpinned by'' higher output of crude palm oil and natural rubber as weather conditions improved.
The CONSTRUCTION [] sector expanded a much slower pace of only 0.6% (1Q11: 3.8%) as infrastructure projects were delayed.
The mining sector contracted at a faster pace of -9.2% (1Q11: -4.2%), following lower production of crude oil as production facilities shut down for maintenance.
BNM said on the demand side, domestic demand showed a slower increase of 5.2% (1Q11: 6.9%), mainly due to sustained growth in private sector spending.
As for private consumption, it increased by 6.4% (1Q11: 6.7%).
Sustained expenditure on emoluments and supplies and services supported the growth in public consumption (4.0%; 1Q 11: 8.9%).
However, growth in gross fixed capital formation moderated to 3.2% (1Q11: 6.5%) which was mainly due to lower public investment.
As for private capital spending, it was sustained by expansion in production capacity. It was also supported by investment in new growth areas in the manufacturing sector as well as exploration and development activity in the oil and gas sector.
BNM noted that in 2Q11, Federal Government development expenditure was lower.
On a cash basis, both gross and net inflows of foreign direct investment were higher at RM13.4 billion and RM6.2 billion respectively (1Q11: +RM7.6 billion and +RM4 billion respectively).
The inflows were broad-based and channelled mainly into the finance, insurance and business services sub-sector, manufacturing and oil and gas sectors.
Direct investment abroad by Malaysian companies recorded a larger net outflow of RM9.4 billion (1Q 11: -RM3.7 billion).
These investments were largely undertaken by companies in the finance and insurance, business services and communications sub-sectors.
"Net inflows of portfolio investment also increased to RM37.6 billion (1Q 11: +RM8.1 billion), reflecting the strong foreign interests in the domestic capital market, particularly the debt securities markets," it said.
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