20100225 1029 Malaysian Economic News.

Malaysia emerged from its first recession in a decade in 4Q09. Gross domestic product (GDP) increased 4.5% yoy in 4Q, after contracting 1.2% in 3Q. That was better than the median forecast of 3.2% in a survey.

• On an annual basis, Malaysia’s 2009 GDP shrank 1.7% yoy (4.6% in 2008). The median forecast in a survey was for a 2.0% decline. (Bloomberg) Please see our Economic Focus for further details.

Inflation rose for a second month in January, climbing 1.3% yoy, after gaining 1.1% in December. The median forecast in a survey was for a 1.5% increase. (Bloomberg) Please see our Economic Update for further details.

The 4.5% growth in Gross Domestic Product (GDP) achieved in 4Q09 is unexpected, says Prime Minister Datuk Seri Najib Tun Razak. The growth stemmed from strengthened domestic and external demand," said Najib. Last year, the country's economic growth contracted to -1.7%, lower than the projected 3%, he said.

• "For 2010, the country's growth is expected to be at 4.9%. The market forecast is moving closer to our expectation," said RAM Group chief economist Dr Yeah Kim Leng. 
•  Minister of International Trade and Industry Datuk Seri Mustapa Mohamed said he was optimistic that the positive trend will continue based on signs that the country's export growth could exceed the 2-3% growth projected for 2010. (Bernama)

The shift in growth from the public sector to the private sector is becoming more evident and this is healthy for the Malaysian economy judging from the positive Gross Domestic Product (GDP) growth registered in 4Q09. "The fourth quarter growth saw more contribution from the private sector and this is an important indicator of the increased public confidence towards the economy," said Datuk S.K. Devamany, Deputy Minister in the Prime Minister's Department (Economic Planning Unit). (Bernama)

The Government’s proposed fuel subsidy scheme based on the engine capacity of vehicles has apparently been shelved, according to source. This plan, which was originally set to be implemented on 1 May, will not proceed even though a lot of the preparatory work has entered the final stage. (The Star)

Prime Minister Datuk Seri Najib Tun Razak said the government had filled 38,495 of the 50,000 vacant posts in the federal civil service between March last year and 24 Feb this year. Overall, conditions in the labour market improved significantly in 4Q09 with total retrenchments declining to 2,125 persons compared with 12,590 persons in 1Q09. (Bernama)

Broad money, M3, grew at an annual rate of 7.9% in January (9.1% in Dec 09), said Bank Negara Malaysia (BNM). It was due to sustained credit by banks to the private sector. (Bernama)