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Economy expected to grow by up to 4 per cent
May 20th, 2017 | 08:59 AM | 1857 views
SARAWAK’S economy is expected to expand by 3.5 to 4 per cent this year, driven by expansion in private sector expenditure and exports.
Second Finance Minister Dato Sri Wong Soon Koh said the services and manufacturing sectors would continue to be the key drivers of growth for the year.
When delivering his winding up speech in the august House yesterday, he said the state’s economy grew modestly by 3.2 per cent last year.
Wong said the services sector is estimated to grow by 6.4 per cent this year, driven by strong expansion in the utilities, wholesale and retail trade, accommodation, and restaurant sub-sectors.
“The services sector grew at a moderate rate of 5.3 per cent in 2016 supported mainly by consumption-related services. The utilities sub-sector recorded a growth of 6.5 per cent following higher consumption of electricity and water demand in 2016,” he said.
He said the manufacturing sector expects 4 per cent growth led by external demand for the state’s resource-based sub-sectors.
Last year, the same sector expanded by 4.8 per cent, driven by an increase in exports of liquefied natural gas (LNG), as well as electrical, electronic, and petroleum products, he said.
Wong said the construction sector is expected to grow by 12 per cent this year compared to 15 per cent last year, supported by the construction of the Pan Borneo Highway, power transmission projects, and projects under the 11th Malaysia Plan (11MP).
“The agriculture sector contracted by 1.1 per cent in 2016 amid a decline in the production of CPO (crude palm oil) and forestry sub-sector.
“For 2017, the agriculture sector is anticipated to grow by 1.9 per cent, supported by higher output of CPO, livestock and fisheries sub-sectors,” he said.
He said the mining sector is expected to grow by 6 per cent, supported by increased output in natural gas and improved product prices.
This sector declined by 0.3 per cent last year due to lower prices and the lower sales volume of crude oil and condensates, and petroleum products.
Wong pointed out that private consumption is projected to improve and grow by 6.6 per cent, sustained by continued wage growth, increases in disposable income, and improved global commodity prices.
He said government measures such as increment in salary for civil servants, reduction in Employees Provident Fund (EPF) contributions from 11 to 8 per cent, higher 1Malaysia People’s Aid (BR1M), and special tax relief of RM2,000 for individual taxpayers with a monthly income of RM8,000 and below for the 2015 assessment year sustained private consumption growth at 4.5 per cent last year.
Public consumption is estimated to expand by 1.4 per cent this year, underpinned by lower spending on supplies and services, he said, adding that such consumption expanded by 7.1 per cent last year due to increased spending on emoluments.
The state’s private investment is projected to grow by 9.5 per cent this year while last year it registered a growth of 6.6 per cent, he said.
“Public investment grew at 1.7 per cent in 2016, in tandem with the roll out of projects under 11MP, the implementation of Pan Borneo Highway, access road to the Baleh hydroelectric power project site, Darul Hana redevelopment, as well as the on-going Rural Transformation Projects.
“For 2017, public investment is expected to expand by 6.8 per cent, driven by capital spending by public enterprises in the transportation, utilities, oil and gas and communications sectors,” he said.
Wong informed the august House that total trade for the state remained firm at RM116.4 billion despite a more challenging external environment last year.
“Exports contracted by 12.7 per cent to RM76.6 billion due to sluggish demand for commodities-related products and weaker commodity prices.
“Export receipts from LNG remained the biggest contributor at 41.9 per cent, followed by crude petroleum at 15.5 per cent, agricultural products at 13.1 per cent, and timber-based products at 7.1 per cent.
“Imports rose by 11.8 per cent to RM39.8 billion in 2016 supported by higher importation of intermediate and capital goods,” he added.
Wong said inflation is expected to remain below 3 per cent this year.
He said inflation last year stood at 1.6 per cent, marking a slight increase compared to 1.4 per cent in 2015.
“This was largely attributed to price increases in alcoholic beverages and tobacco by 14.1 per cent; housing, water, electricity, gas and other fuels by 2.5 per cent; and education by 1.9 per cent.”
He said the labour market is expected to improve further this year, as last year the labour market remained stable with continued broad-based expansion across all economic sectors.
“The unemployment rate declined from 3.5 per cent to 3.3 per cent. The demand for workers was still strong in 2016. There were 59,106 job vacancies reported to the Manpower Department last year,” added Wong.
courtesy of THE BORNEO POST
by BORNEO POST
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