The Malaysian economy is projected to grow 4.9 percent next year, slightly higher than the anticipated 4.8 percent growth this year, according to the Economic Outlook 2019 report released on Friday.
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Malaysian Finance Minister Lim Guan Eng, who unveiled the 2019 budget on Friday, said in the report that the growth will be underpinned by services and manufacturing sectors, which are expected to grow 5.9 percent and 4.7 percent respectively next year, slowing down from 6.3 percent and 4.9 percent this year.
Malaysia's economic growth slowed down to 4.9 percent in the first half of 2018.
According to the report, agriculture sector is estimated to rebound 3.1 percent following a decline of 0.2 percent which is dragged by weather factor. The mining sector is likely to improve after a fall of 0.6 percent due to supply shocks this year.
The construction sector will grow at a moderate pace of 4.7 percent, slightly better than 4.5 percent this year, underpinned by new planned supply in the affordable homes and industrial segment.
Meanwhile, domestic demand growth is expected to remain resilient at 5 percent and 4.8 percent in 2018 and 2019, respectively. The growth will be steered by sustained private sector expenditure at 6.5 percent this year and 6.4 percent next year.
Private consumption will remain as the major driver, expanding by 7.2 percent, supported by stable labor market, benign inflation and conducive financing condition.
Private investment is also projected to grow at a faster pace of 5 percent next year, after expanding 4.5 percent this year, supported by capital spending in technology-intensive manufacturing and services sectors.
The public sector expenditure, however, is anticipated to further decline to 0.9 percent next year after recording a marginal growth of 0.1 percent this year.
Public consumption is anticipated to rise marginally by 1 percent this year, while public investment is expected to decline 1.5 percent and 5.4 percent respectively in 2018 and 2019.
Despite heightening trade tensions, the gross exports are estimated to grow 3.9 percent next year, moderating from 4.4 percent this year, driven by continued demand for manufactured goods, especially electrical and electronics products.
According to Lim, Malaysia as a small and open economy would benefit immensely from greater global integration, and the government will continue to adopt an open trade and investment regime.
To enhance prudent fiscal management, the government will also accelerate zero-based budgeting system, rationalize assistance programs, improve procurement process and broaden the revenue base, he added. ■