KUALA LUMPUR, Nov 21 — The Najib administration received a fillip yesterday with new economic data showing that the prime minister’s moves to rev up the economy are working.
Gross domestic product contracted 1.2 per cent in the third quarter from a year earlier, shallower than the 2 per cent drop predicted by most economists.
The economy shrank 6.2 per cent in the first quarter of the year, but improved a bit in the second quarter by contracting 3.9 per cent.
While Malaysia is still in recession, things are looking up, economists said.
“If the recovery momentum is maintained, positive growth is more likely now in the fourth quarter,” said Yeah Kim Leng, chief economist at Malaysian ratings agency RAM.
Prime Minister Satuk Seri Najib Razak in March announced a RM60 billion package to lift the sagging economy, and there is now evidence that the plan is working. This was in addition to the RM7 billion stimulus package announced in November last year.
Bank Negara Governor Tan Sri Zeti Akhtar Aziz told a news conference yesterday that domestic economic activity is gaining strength. The construction sector grew by a strong 7.9 per cent in the third quarter due to the implementation of construction projects under the stimulus packages, she said.
The improving economy provides good news to Datuk Seri Najib and the ruling Barisan Nasional (BN) coalition, amid recent concerns about Malaysia’s loss of lustre to investors following reports of a shortage of electrical and electronic engineers.
The Najib administration is helped further by a recent survey by independent pollster Merdeka Centre which revealed that voters are beginning to feel positive about the economy.
In the survey conducted from Sept 4 to 14, 56 per cent of Malaysians said they were satisfied with Najib’s performance in office.
A total of 47 per cent of Malaysians felt the country was heading in the right direction over issues which include the economy, while 56 per cent were satisfied with the way things were going.
The economy is a key challenge for Najib as he tries to win back support that was lost in last year’s general election.
Political analyst Shaharuddin Badaruddin of Universiti Teknologi Mara said: “Najib is quite sharp compared to the previous prime minister, so there is some confidence there from investors.”
Still, there are political issues that Najib needs to tackle.
“To gain more confidence, he needs to strengthen BN and stabilise the Malaysian Chinese Association and Malaysian Indian Congress. He also needs to have a better relationship with the opposition states,” said Shaharuddin.
He was referring to ties between the federal government and the four Pakatan Rakyat states that include economic powerhouses Selangor and Penang.
The states have a tough time getting development allocations as such funds are controlled by the federal government.
The economic rebound is important also for Najib, who last week announced plans to grow Malaysia by 6 per cent a year until 2020, so that it could become a “high-income” nation.
The good economic news will provide a positive backdrop as the premier travels to New York and Washington next week to market Malaysia to potential investors. — The Straits Times
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