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Annual Report 2002 : Southeast Asia

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Malaysia

Economic performance

Malaysia’s economic performance improved in 2002 following a slump in 2001. The GDP growth rate rose to 4.2% from 0.4% recorded in 2001, helped by improved global trade and supported by strong domestic consumption. Public consumption expanded by 13.8% in 2002, following a 17.6% rise in 2001. Public investment expanded by 4.6% and the services sector by 4.5%. Domestic demand was supported by the Government’s expansionary fiscal policy. The fiscal deficit recorded 5.6% of GDP in 2002, about the same level as the 5.5% of GDP in 2001. Monetary policy remained accommodative and, with lower interest rates, helped generate further economic activities, while inflation remained low. External trade recovered, with exports rebounding from a contraction in 2001 to a growth of 6.1%, and imports to 8.1% in 2002. The rebound was led by an expansion in trade with the People’s Republic of China and other Southeast Asian countries.

ADB operations

Operational strategy: Malaysia has not availed of new loans from multilateral finance institutions to finance public sector investments in recent times. The implementation of three ADB loans provided before 1997 continues. Malaysia remains an active partner in subregional activities supported by ADB.

Policy dialogue: Malaysia’s experiences in finance, privatization, SME development, and government service were discussed.

Loans and technical assistance: No loans or technical assistance were approved in 2002.

Project implementation: Since joining ADB in 1966, Malaysia has received 76 loans totaling $1,987.5 million, of which 3 were active at the end of 2002. Contract awards totaled $12.7 million, bringing the cumulative figure to $1,413.2 million. The contract awards ratio for 2002 was 25.4%—higher than ADB’s average of 22.6%. Disbursements in 2002 totaled $14.3 million, bringing cumulative disbursements to $1,380.9 million. The disbursement ratio was 18.8%—lower than the ADB-wide average of 22.2% (see tables 14–23 in the Statistical Annex).

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