Malaysia likely emerged from recession: think-tank

Asian Defense News: KUALA LUMPUR (AFP) - – Malaysia's economy likely emerged from recession in the fourth quarter of 2009 and will post 3.7 percent growth in 2010 as the global economy recovers, a leading think-tank said Tuesday.
Southeast Asia's third-largest economy suffered three consecutive quarters of contraction in 2009 and the government forecasts it will shrink 3.0 percent over the year before rebounding to modest growth of 2.0-3.0 percent in 2010.
"The technical recession is likely to end in the fourth quarter 2009," the Malaysian Institute of Economic Research (MIER) said in a report.
"This is supported by effects of the larger public infrastructural expenditure, manufacturing turnaround, improved services trade, and higher domestic spending," the influential think-tank said.
The MIER maintained its forecast for Malaysia's export-dependent economy to contract by 3.3 percent in 2009, before growing at 3.7 percent this year and 5.0 percent in 2011.
"From 2010 onwards, we expect the economy to be on a normal track," MIER chief Zakariah Abdul Rashid told reporters, saying the services sector "will be a pillar of strength" against a stodgy manufacturing sector.
"However, the road ahead will be a bumpy one so we have to be cautious," he said, citing downside risks such as weak business and consumer sentiments, as well as volatile commodities prices that may impede a faster recovery.
Malaysia has announced two stimulus packages. The second package unveiled in March last year was billed as containing some 60 billion ringgit (17.7 billion dollars) in measures to pump-prime the economy.
The government in its 2010 annual budget slashed operating expenditure by 13.7 percent to 138.3 billion ringgit (40.7 billion dollars), to reduce the fiscal deficit from 7.4 percent in 2009 to 5.6 percent this year.

*AFP - Wednesday, January 27