KUALA LUMPUR, Oct 13 (Xinhua): The Malaysian economy is expected to grow by 4.7 per cent in 2019 and 4.8 per cent in 2020 amid external headwinds, said its economic outlook report.
Malaysia's Finance Minister Lim Guan Eng said in the report that the growth is underpinned by resilient domestic demand, particularly household spending following stable labor market and low inflation.
Malaysia's gross domestic product (GDP) expanded by 4.7 per cent in the first half of the year. The government earlier projected the economy to grow between 4.3 per cent and 4.8 per cent this year.
According to the report, private sector expenditure will remain the key driver of growth with private consumption and investment rising 6.8 per cent and 1.5 per cent in 2019, respectively. The growth rates are anticipated to improve to 6.9 per cent and 2.1 per cent in 2020, respectively.
Public sector expenditure, however, is estimated to decline by 1.8 per cent in 2019, weighed down by lower investment spending. The growth will likely to rebound 0.8 per cent in 2020, driven by revival of strategic projects.
Amid global trade tensions, Malaysia's gross exports this year are estimated to expand by only 0.1 per cent. The gross exports growth rate is expected to improve to 1 per cent due to potential improvement in global trade activities and the uptick in the electrical and electronics cycle.
Underpinned by resilient domestic demand, services sector, which constituting about 58 per cent of GDP, is projected to grow 6.1 per cent and 6.2 per cent in 2019 and 2020, respectively.
Dragged by global trade tensions, manufacturing sector is likely to grow at a slower pace of 4 per cent and 4.1 per cent in 2019 and 2020, respectively.
The agriculture sector is expected to accelerate by 4.3 per cent this year on rebound in palm oil production and natural rubber. But growth is expected to be at a slower pace of 3.4 per cent next year.
The construction sector is expected to expand only 1.7 per cent this year weighed down by subdued growth of the residential and commercial properties. However, the growth is likely to be at a higher pace next year due to acceleration and revival of mega projects and building of affordable homes.
The mining sector is forecast to turn around 0.6 per cent this year driven by higher production of natural gas, but the growth rate is anticipated to slow down to 0.3 per cent next year.
