Dato Sri Wong Soon Koh
KUCHING: The state economy is expected to grow by four per cent this year, sustained by expansion in private sector expenditure.
According to Second Finance Minister Dato Sri Wong Soon Koh the manufacturing and services sectors would continue to be the prime mover for the state’s economy in 2016.
On the supply side, he anticipated all economic sectors to continue to register positive growth despite challenging global environment and weaker commodity prices. The services sector is expected to grow 4.4 per cent with moderate growth across all sub-sectors supported by domestic consumption and investment activities.
“In 2015, the growth in wholesale and retail sub-sector eased in tandem with slower demand of consumer durable goods and transport vehicles segments. The utilities, transportation, storage and communication sub-sectors are anticipated to continue their expansion in 2016, benefiting from improved trade activity.
“The accommodation and restaurants sub-sector is expected to grow six per cent this year from 4.6 per cent in 2015, supported by sustained growth in the tourism and tourism-related sub-sectors,” Wong said when delivering his ministry’s winding-up speech yesterday.
He reported that the manufacturing sector expanded by 3.4 per cent in 2015. The production of timber and timber-based products, including veneer, plywood and sawn timber as well as petroleum and petroleum-related products moderated as a result of slower demand from Japan, Korea, Taiwan and China.
Export values to these countries dropped by 25 per cent to RM57.1 billion in 2015. Growth is projected to improve to 3.9 per cent in 2016 as a result of higher output of domestic industries particularly construction related sub-sectors.
The construction sector registered a better performance of 10.6 per cent in 2015, mainly from the vibrant growth in non-residential and civil engineering sub-sectors. The total value of construction work done for both sub-sectors expanded 23.6 per cent last year.
“Major infrastructure projects such as Pan-Borneo Highway, Samalaju Port, major bridges and power transmission projects – which started in 2015 – have contributed to the growth in civil engineering sub-sector, For this year, the construction sector is expected to grow by 9.7 per cent, led by civil engineering projects, particularly the infrastructure segment.”
The agriculture sector expanded by 4.6 per cent last year from the growth in the production of crude palm oil which increased by 7.7 per cent. Demand from emerging economies for agriculture produces was slower amid weaker global agriculture commodity prices. The sector is anticipated to grow at 3.9 per cent for 2016, supported by higher output of palm oil, livestock and fisheries sub-sectors. The mining sector, driven by higher output of natural gas, is expected to expand at 2.8 per cent.
On the demand side, Wong projected public consumption to grow at 3.6 per cent, supported by additional allocation in emoluments attributed by the salary revision of civil servants as well as supply and services. Private consumption is projected to improve by 6.4 per cent as the impact of the Goods and Services Tax (GST) lapsed and further benefiting from the increment of the national minimum wage and salary revision of civil servants effective next month.
Public investment is expected to expand by 4.4 per cent in tandem with the roll-out of projects under the 11th Malaysia Plan, while private investment is projected to grow by 6.6 per cent. Inflation is expected to remain below three per cent amid lower inflation in transportation and housing, water, electricity, gas and other fuel categories.
Wong said the labour market remained stable with continued broad-based expansion across all economic sectors. The unemployment rare was 3.5 per cent and demand for workers was still strong with 67,282 job vacancies reported to the Manpower Department last year.