The economy grew by 4.8% year on year in the fourth quarter of 2010-a much slower pace of growth than in the first half of 2010, when real GDP grew by an average of 9.5% year on year. Despite the slowdown in momentum in the fourth quarter, the economy grew by a rapid 7.2% in 2010 as a whole-its fastest pace of growth since 2000, when real GDP surged by 8.9%.

From the expenditure side, growth in the fourth quarter of 2010 was underpinned by firm private consumption and investment spending, which grew by 6.5% and 9.2% year on year respectively. Investment spending was bolstered by higher outlays in export-oriented industries in the private sector. Government expenditure contracted by 0.3% in the fourth quarter. Quarter-on-quarter comparisons point to a much stronger performance, with investment spending surging by 47.6% in the fourth quarter. The external sector weakened significantly in October-December. Exports of goods and services grew by a meagre 1.5% year on year, following expansion of 6.6% in the third quarter. Imports of goods and services continued to outpace exports, but they too lost considerable growth momentum, expanding by only 3.3% in the fourth quarter, compared with 11% in the third.

GDP data at factor cost pointed to a particularly weak performance in the primary sectors of the economy in the fourth quarter of 2010. Output contracted on a year-on-year basis in both the agricultural and mining sectors. Owing to a significant drop in palm oil production, agricultural output fell by 4.3% year on year, while ongoing declines in crude oil production led to a 1.3% contraction in mining and quarrying. That said, the declines reported in the primary sector were more than offset by strong performances by manufacturing and services, as both these sectors expanded by 6.2% year on year in the fourth quarter.

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