KUCHING: The state economy is expected to achieve continuous growth of five per cent in 2015 in view of sustained private investment backed by domestic and external demands this year.
MAIDEN BUDGET SPEECH: Chief Minister Datuk Patinggi Tan Sri Adenan Satem presenting his speech at the Second Meeting of the Fourth Term of the 17th State Legislative Assembly (DUN) at the DUN complex in Petra Jaya, Kuching yesterday. The current meeting started yesterday and ends next Wednesday (Nov 19).
On the demand side, private investment is projected to expand to a double digit growth of 10.6 per cent in 2015 driven by the investment of export oriented industries, particularly in the Sarawak Corridor of Renewable Energy (Score).
“Public investment is also expected to expand at 5.1 per cent in 2015,” said Chief Minister Datuk Patinggi Tan Sri Adenan Satem during the first reading of the Supply Bill (2015) 2014 yesterday.
This he said was in anticipation of more infrastructure projects such as the new Mukah Airport redevelopment of traditional villages through Darul Hana development and the Pan-Borneo Highway.
Touching on the state economic performance in 2014, he said private investment was expected to grow at 11.1 per cent driven by the ongoing implementation of projects under the Economic Transformation Programme and coupled with strong inflow of foreign direct investment which has led to a positive spillover to the domestic-oriented investment.
“This is reflected in the total approved investment for both domestic and foreign direct investment amounting to RM7.8 billion for the first six months of 2014. A surge of 77.1 per cent,” said Adenan who is also Minister of Finance.
Public investment he said was anticipated to expand moderately at 3.8 per cent in 2014 supported by capital expenditure on major government infrastructure projects for Score areas as well as other government projects to improve and upgrade infrastructure and facilities particularly in rural areas.
He also said public consumption is expected to grow at a moderate pace of three per cent in 2014 reflecting the prudent financial management by the government.
The inflation rate in Sarawak as measured by the Consumer Price Index he added was averaged at 3.3 per cent in the first eight months of 2014 and expected to remain below 3.5 per cent for the whole year.
For 2015, public consumption is anticipated to expand by 3.9 per cent mainly due to government spending on emoluments, supplies and services to further enhance public service delivery.
“By contrast, private consumption is expected to expand by 7.1 per cent in 2014 attributed to the stable income growth and better employment conditions as well as cash assistance programmes to the targeted income groups,” he added.
For 2015, private consumption is anticipated to register a moderate growth of six per cent supported by continued favourable employment prospects and wage growth.
On the supply side, growth of the state economy is expected across all major economic sectors in 2014 spearheaded by the services and the manufacturing sectors.
The service sector is expected to grow at 5.2 per cent this year and 5.1 per cent in 2015.
“Robust growth can be seen in the accommodation and restaurant, wholesale and retail trade, communication and transport as well as real estates and business services sub-sectors,” he added.
The wholesale and retail trade was expected to expand moderately by 6.2 per cent next year driven by strong domestic consumption amid consumer’s cautious sentiment due to the implementation of the Goods and Services Tax (GST).
The construction sector he said was expected to grow at 6.3 per cent in 2014 with the rapid implementation of government projects under the Tenth Malaysia Plan and major construction projects in Score area undertaken by both the public and private sector.
“For 2015, the construction sector is expected to grow by 7.2 per cent as we continue to roll-off the Tenth Malaysia Plan, particularly in the rural areas,” he said.
Other sectors which will contribute to the state’s economic growth are transport, storage and communication sub-sector, manufacturing sector, mining and quarrying sector and the agriculture sector.