'Govt has yet to spend more to boost economy'

ALTHOUGH the economy did better than expected in the third quarter, the figures suggest that the government has yet to spend more to boost economic activity, an economist said.

Investments only grew 3.1 per cent compared with 13 per cent in the same period a year ago.

"It may be that heightened political uncertainty as well as greater global growth concerns have played a role in dampening capital spending.

"It also suggests that the government's plans for much stronger public sector investment have yet to come to fruition," said HSBC Bank's Robert Prior-Wandesforde.

Malaysia's economy grew at its slowest pace since the second quarter of 2005, rising 4.7 per cent, as export growth fell. Economists had expected it to expand by 4.3 per cent.

HSBC expects the economy to do well among its peers in Asia next year, although overall gross domestic product growth is likely to remain weak for some time as export growth continues to soften sharply.

It has also not ruled out further fiscal action.

However, Prior-Wandesforde said the important task is to implement the so-called "high impact" infrastructure projects that the government has been talking so enthusiastically about for some time now.