Who do you believe?..........Electronics Could Fuel Malaysia Recovery -PM
KUALA LUMPUR (Reuters) - There are signs Malaysia's key electronics sector is picking up, stirring hopes economic growth will recover in the fourth quarter, Prime Minister Mahathir Mohamad said on Thursday.
``There are some signs that there is recovery in the electronics industry because the imports of intermediate goods have shown improvement and I'm told that order books are also being filled up,'' Mahathir told an international advisory panel to Malaysia's hi-tech zone, the Multimedia Super Corridor (MSC).
``So we expect by the fourth quarter there should be recovery,'' he said.
The MSC advisory panel is a council of international industry leaders whose firms have invested in Malaysia and are helping to build the country's role in the global knowledge economy.
The hi-tech enterprise corridor runs from the Petronas Twin Towers in downtown Kuala Lumpur to the new town of Cyberjaya 45 minutes away by road.
Mahathir pressed on with building Cyberjaya alongside Malaysia's new administrative capital of Putrajaya despite the Asian crisis in 1997, but the project has many critics, who say it is slow taking off.
In the past year a number of the multi-national hi-tech firms with plants located largely in and around the northwest coastal city of Penang, have announced lay-offs due to a sharp downswing in the global technology cycle.
And Malaysia's dynamic electronics sector has been sputtering due to weakening U.S. demand.
Exports of electronics and electrical goods accounted for 55 percent of Malaysia's exports in July, but at $3.87 billion the sector was down 23 percent on the year, data released this week show.
Malaysia's export-oriented economy has suffered a sharp slowdown after last year's 8.5 percent growth in gross domestic product, but the government says it has managed to avoid following Singapore and Taiwan into recession thanks to the broader base of its economy and the government's fiscal boosters.
Second quarter gross domestic product showed just 0.5 percent growth on the year, but Mahathir said he expected recovery to be in place by the fourth quarter -- even before the effects of the injection of money and spending in the economy takes full effect.
``Malaysia has managed to get around the effects of the U.S. recession. We think that the third quarter might show some performance and the fourth quarter would be even better,'' Mahathir said.
``We have injected more money into the economy and pump primed the economy and that is having some effect. But the effect will actually be felt a little bit later,'' he said. |
