Malaysia is one of the top Asian tigers this year, with growth that lags only South Korea
KUALA LUMPUR, Malaysia (Reuters) -- Malaysia's gross domestic product grew 5.6 percent in the third quarter from a year earlier, the fastest quarterly growth in nearly two years, the central bank said.
The growth, the fastest since the fourth quarter of 2000 and coming off a low base last year, put Malaysia among the best performing Asian Tiger economies.
It lags only Korea, which posted third quarter growth of 5.8 percent.
Central Bank Negara Governor Zeti Akhtar Aziz said growth would match the rate or be even faster in the fourth quarter and the economy was on target to meet an official forecast of four to five percent growth this year.
She said leading and coincident indices suggested growth should hold up in early 2003, but said much would depend on external influences -- notably any slowdown in the United States or war in the Gulf.
Even then, she said, the government had leeway to give the economy another booster.
"The fundamentals remain strong. If necessary, the government will make further fiscal stimulus," Zeti told a press briefing.
Second-quarter growth was 3.9 percent year-on-year, the central bank showed Wednesday, and first quarter growth was 1.1 percent.
Malaysia's economy contracted 0.9 percent in the third quarter last year, hit by a slump in global demand for electronics, its main export.
The average forecast of third quarter growth from a poll of economists released earlier this week was bang on.
Some economists, however, have lowered their projections for the full year due to uncertainty over the sputtering U.S. economic recovery.
The United States is Malaysia's largest trading partner, buying one-fifth of its exports annually, and is also its biggest source of foreign direct investment.
The poll of 10 economists on Monday put the average growth forecast for 2002 at 4.2 percent, slower than the 4.5 percent expansion seen in a similar poll in July.
The Malaysian data follows a slew of upbeat reports from around the region, particularly from other export-oriented economies.
Manufacturing growth of 11.8 percent year-on-year in October in Singapore helped soothe worries the economy could slip back into recession.
Thailand recorded 18 percent growth in exports in October, its strongest for 25 months, and Hong Kong's export growth of 12.9 percent in October was its highest for two years.
Malaysia's manufacturing sector, which accounts for 80 percent of exports and a third of GDP, expanded by 7.3 percent from a year earlier in the third quarter.
Services, which account for 55 percent of the economy, grew 3.4 percent. The agriculture sector grew 5.4 percent.
The data released by Bank Negara showed third quarter GDP grew 3.4 percent from the preceding quarter.
The central bank data is not seasonally adjusted, reducing the significance of the change between the second and third quarters.