KUALA LUMPUR: The Malaysian economy contracted 6.2% on-year in the first quarter of 2009, the worst since the Asian financial crisis, as manufacturing output shrank sharply as exports and industrial production fell.
Bank Negara said on 27 May that manufacturing contracted 17.6%, mining fell 5.2% while agriculture saw a 4.3% decline. Services also showed a decline of 0.1% but construction rose just 0.6%.
According to economists, the contraction was worse than expected. In the fourth quarter of 2008, the economy grew at only 0.1%.
The central bank said the sharp contraction in the first quarter was due to a significant deterioration in external demand, following the deepening recession in advanced economies.
Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said the large inventory drawdown, particularly in the manufacturing and commodity sectors also contributed to the decline in growth in 1Q09.
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This article first appeared on Wednesday, 27 May 2009 under the same heading in www.theedgemalaysia.com. Used with permission.