Bank Negara announced yesterday that the country’s GDP (Gross Domestic Product) for the second quarter (Q2) of the year that ended on June 30 expanded by 4% as compared to the same quarter in 2010. This was largely due to the lower demand and disruptions faced in the global supply chain after the recent Tsunami and earthquake disaster that hit Japan in March which saw the activities in the manufacturing sector slowing down.

It was reported that Malaysia’s GDP for Q1 expanded by 4.9% while it grew by 4.4% for the first six months of the year. Bank Negara also stated that the overall growth will be influenced through the sustained expansion of the private domestic demand which increased by 5.2% from 6.9% in Q1 and this was due to the sustained growth in spending from the private sector. Meanwhile, the construction sector grew to 0.6% from 3.8% in Q1 which was largely due to some delays with the infrastructure projects and their implementations.

Driven by supply factors, Bank Negara added that the headline inflation rate rose to 3.3%. This was measured by the change in the CPI (consumer price index) which were mainly driven by the increase of consumer prices from then food and non-alcoholic beverages category.