KUALA LUMPUR : Malaysia’s
economy may be bucking the world trend with its 5.4 per cent growth in the
second quarter of the year but it is being propped up by domestic spending,
Singapore’s Business Times (BT) said today, suggesting that the growth may not
hold out for long without elections being called sooner rather than later.
The business paper noted
that Southeast Asia’s third biggest economy had had outstripped its neighbours
in the second quarter, but that the growth was due to domestic demand, which
rose by a whopping 13.8 per cent compared to 9.7 per cent in the first three
months of this year.
It noted that while
investment spending ballooned to 26.1 per cent from 16.1 per cent in the first
quarter and that government spending was up 9.4 per cent against 7.3 per cent
previously, export growth was slowing down, from three per cent in the previous
quarter, it was now recording only 2.1 per cent.
“The generous government
handouts and stronger investment spending under the ETP has clearly helped to
boost growth,” the paper said today in its Malaysia Insight column, referring
to Prime Minister Datuk Seri Najib Razak’s various cash handouts and policy
reforms under the Economic Transformation Programme.
All sectors had benefited
from Najib’s “giveaway” programme, the paper said, as the citizens were
spending.
But the paper warned that
Najib was taking a “risky bet as the rating agencies have been breathing down
his neck”.
It noted that Bank Negara
continues to expect the strong domestic demand to drive the country’s economic
growth even as it noted “downside risks emanating from external developments
remain”.
The Singapore business paper
said that it would be better for Najib to call for elections sooner rather than
wait for his BN government’s mandate to expire next April.
“But most people are tired
of the incessant politicking.
“Perhaps the premier should
wait no longer and call the general election sooner rather than later,” it
said, suggesting that Malaysia’s growth may not hold out until next year.
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