Malaysian economic growth slows sharply

Across the third quarter Malaysia’s economic growths has stunted to its slowest growth for over three years as the global recession has hurt the export trade, and has resulted in gross domestic product falling to 4.7 percent from 6.7 in the second quarter.

The Malaysian central bank has announced that it would consider lowering interest rates further as and when needed. Interest rates have already been cut from 3.5 percent to 3.25 percent already this week.

Malaysia follows other East Asian countries into a slowdown as growth rates fell in both the Philippines and Thailand.

The interest rate cut this week is the first in over five years, although there are a number of measures that are open to the government in order to develop and maintain the domestic economy, as stated by the Finance minister in an interview today.

It is clear that exports have been hurt due to the reduced demand, although this has had a knock-on effect on industrial production, and with the outlook bleak as both UBS and the International Monetary Fund have indicated, the country may fall into recession by 2009.

Finance Minister, Najib Razak, has remained optimistic and announced a public spending program at the beginning of the month and has predicted that growth rates will not fall below 3.5 percent in 2009.

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