KUALA LUMPUR: All economic sectors are expected to expand this year supported mainly by the continued growth of domestic demand, says Bank Negara Malaysia (BNM).
From the high base of 2010, the services and manufacturing sectors are expected to expand at a more moderate pace this year, underpinned by the favourable growth in domesticdependent sub-sectors.
However, trade-related services and export-oriented manufacturing industries will record slower growth in line with the expected moderation in external demand, BNM said in its Annual Report 2010 released yesterday.
The central bank said the services sector will remain the largest contributor with a projected growth rate of 5.9 per cent for this year, compared with 6.8 per cent recorded last year.
All sub-sectors are expected to expand further driven by the sub-sectors that are dependent on domestic demand such as wholesale and retail trade, finance and insurance, and communications.
In the manufacturing sector, the export-oriented industry is expected to see a slower expansion amid an environment of moderate external demand. In particular, the electrical and electronics (E&E) cluster will experience a slower growth after a sharp rebound last year and also in line with the trend in world semiconductor sales, BNM said.
Nevertheless, the cluster will continue to be supported by demand for products in the consumer and communications segments, particularly from within the region, it said.
The implementation of investments in new areas such as solar cell and light-emitting diodes (LED) manufacturing, is expected to further benefit the cluster.
As for the agriculture sector, it is expected to record a higher growth of 3.4 per cent this year due to a turnaround in the production of industrial crops.
The mining sector meanwhile is projected to expand by two per cent reflecting higher natural gas output with the opening of two new gas fields in offshore Terengganu and Sarawak, the BNM report said.
However, crude oil production is expected to decline further due to scheduled maintenance and the implementation of the Reservoir Management Plan to sustain longterm production.
As for the construction sector, BNM said its growth is expected to improve to 5.4 per cent this year from 5.2 per cent recorded in 2010, supported by expansion across all sub-sectors.
In particular, the civil engineering sub-sector is expected to benefit from on-going projects such as the Second Penang Bridge, double-track rail networks, Low Cost Carrier Terminal (LCCT), as well as oil and gas terminal in Sabah.
The sub-sector will be also further supported by the implementation of new major projects such as the construction of power plants in Terengganu and Sabah as well as the Klang Valley light rail transit (LRT) extension. – Bernama