(AFP) The sales of manufactured goods fell 10.5 percent year-on-year in July, the Statistics Department said today.

Sales for the month were valued at RM25.6 billion against RM28.6 billion in July last year. They were down 1.2 percent from June.

Nizam Idris, an economist with Singapore-based IDEA Global said he expected that "the down trend in manufacturing sales will continue for the next few months due to poor external demand".

Most analysts predict the economy will grow by less than half the 8.5 percent rate of last year.

The government will for a second time revise its official growth forecast for this year when it unveils its 2002 budget in October.

In March it cut its growth estimate from seven percent to between five and six percent amid the US slowdown.

The department of statistics said the number of people working in the manufacturing sector fell 2.0 percent over the year to July.

Inflation up

In a separate report, the department said inflation in Malaysia rose 1.3 percent year-on-year in August.

In the eight months to August, inflation rose 1.5 percent compared to the same period last year.

Food, rent, fuel and power and transport and communication accounted for 89.3 percent of the overall rise.

Nizam said the inflation rate was within the government's forecast of 1.5 to 2.0 percent for the year.