KUALA LUMPUR, Nov 2 — The following are the highlights of the Economic Outlook 2019 report, the first presented under the Pakatan Harapan government. The 142-page report was released by the Ministry of Finance in conjunction with the tabling of the 2019 Budget today by Finance Minister Lim Guan Eng in Parliament.

• Global economy to expand 3.7 per cent in 2018 and 2019, lower than the earlier forecast of 3.9 per cent by the International Monetary Fund
• Global trade to widen by 4.2 per cent in 2018 and 4.0 per cent in 2019 (2017:5.2 per cent)
• Malaysia’s real Gross Domestic Product to increase 4.8 per cent and 4.9 per cent in 2018 and 2019, respectively, steered by sustained private sector expenditure
• Private sector growth expenditure is expected at 6.5 per cent this year and 6.4 per cent in 2019, constituting about 72 per cent of the Gross Domestic Product
• Private consumption to remain the major growth determinant in 2019, expanding 7.2 per cent, supported by a stable labour market, benign inflation and conducive financing conditions
• Private investment to post a higher growth of 5.0 per cent in 2019, attributed to capital spending in technology-intensive manufacturing and services sectors
• Public consumption to expand 1.8 per cent in 2019 on account of higher spending on emoluments, as well as, supplies and services
• Public investment to decline 1.5 per cent and 5.4 per cent in 2018 and 2019, respectively, mainly weighed down by public corporations’ lower capital spending
• Gross National Income to widen 7.1 per cent to RM1.5 trillion in 2019; private sector will account for 86.9 per cent of total savings while Gross National Savings will grow 3.4 per cent
• Total investment to increase 5.0 per cent to RM366.8 billion in 2019, leading to lower savings-investment surplus, ranging between two per cent and three per cent of Gross National Income
• Current account surplus to shrink 2-3 per cent in 2019 of Gross National Product (2018: 2.5-3 per cent)
• Gross exports to grow 3.9 per cent in 2019; imports anticipated to grow 4.1 per cent
• Travel account surplus to be higher at RM28.2 billion in 2019 driven by continued tourist arrivals
• Primary income account to register a higher deficit at RM41.4 billion, mainly due to higher profits expected by locally-incorporated multinational companies, a larger net outflow of compensation to foreign professional skills and expertise
• Manufacturing sector to expand 4.7 per cent in 2019, primarily driven by continuous demand for electrical and electronics
• Construction sector to improve slightly in 2019, expanding 4.7 per cent following an increase in new planned supply in affordable houses and industrial segments
•  Agriculture sector to turn around next year with a 3.1 per cent growth from a 0.2 per cent decline expected in 2018
• Oil palm to register a 4.1 per cent growth in 2019 on higher output, price improvement to RM2,400 per tonne (from an average of RM2,300 in 2018), and an increase in matured areas, which are set to reach 5.5 million hectares
• Crude palm oil closing stocks to decline by 2.2 million tonnes in 2019 due to higher exports to major trading partners
• Federal government’s direct debts recorded RM687 billion or 50.7 per cent of GDP at end-2017
• Federal government’s debts expected to record 51.8 per cent of GDP in 2019
• Total liabilities will decline to 73.5 per cent next year compared to 74.6 per cent expected at end-2018
• Government will reduce holdings in non-strategic companies
• The Public-Private Cooperation Model will be undertaken via open tenders and not by the method of direct negotiations
• Government is committed to implementing fiscal consolidation measures to reduce the deficit to 3.4 per cent in 2019, 3.0 per cent in 2020 and 2.8 per cent in 2021
• Federal Government continues to guarantee financing for infra projects under construction including MRT2 and LRT3
• Government to create debt management office to look into and manage government’s debts and liabilities
• Klang Valley Double Tracking Project 2 to be re-tendered via open tender
• 1MDB and Malaysian government will not pay the balance of US$4.32 billion to IPIC and Aabar Investment PJS, and will claim for the return of the US$1.46 billion already paid.
• Foreign online service providers have to register with the Customs Department, impose the service tax and remit it from January 1, 2020
• Government will launch a special Voluntary Disclosure Programme for taxpayers to declare whatever income not reported
• Malaysia will implement the Automatic Information Exchange with other taxation authorities to enable auditing and investigation
• Government will study more than 130 types of schemes for fiscal investment support undertaken by 32 agencies encouraging investments to ensure the relevant taxation incentives and no overlapping
• The Property Gains Tax will be raised to 10 per cent from five per cent for companies, non-citizens and non-permanent residents in the sixth year and above
• The Real Property Gains Tax (RPGT) for citizens and permanent residents is raised to five per cent
• RPGT is exempted for properties, low, medium cost homes and affordable homes below RM200,000
• The stamp duty for property transfers costing more than RM1 million is raised to four per cent
• The maximum tax rate option of RM20,000 allocated under the Labuan Business Activity Tax Act 1990 is abolished
• The casino licence is raised to RM150 million annually from RM120 million
• Casino duty is raised to 35 per cent of gross income
• The "dealer” machine licence will be raised to RM50,000 annually from RM10,000
• The duty on gambling machines is raised to 30 per cent on gross collections
• The Federal government is expected to collect RM261.8 billion in 2019, encompassing the special Petronas dividend of RM30 billion
• The government will allow property crowdfunding driven by the private sector as an alternative for the purchase of a first home and supervised by the Securities Commission
• Venture funds managed by government agencies will be streamlined to ensure the funds are channelled only to high potential companies
• ​​Government-related Investment Funds will allocate RM2 billion in matching grants for investment in private equity funds and venture capital funds
• The government plans to establish a Co-Investment Fund totalling RM50 million for the private sector through an alternative financing platform
• Capital Market and Services Order to introduce a new framework to approve and monitor digital forex activities and token market will be gazetted in 2019
• Government will implement a Fibre Optic Plan and National Connectivity with an allocation of RM1 billion
• The government has allocated RM210 million from 2019 to 2021 to encourage the move to Industry 4.0
• The Malaysia Productivity Corporation will undertake the Readiness Assessment programme to assist 500 small medium enterprises (SMEs) to switch to Industry 4.0 technology
• RM2 billion will be made available under the Business Financing Guaranteed Scheme  to enable SMEs to invest in automation and modernisation
• The government will make available a Digital Transformation of Industries fund of RM3 billion and a subsidy incentive of two per cent
• The government has proposed the imposition of income tax at the concession rate of 10 per cent on the overall statutory income related to the Principle Hub activities for a period of five years
• Government will implement a SME financing fund by commercial financing institutions of RM4.5 billion with a 60 per cent guarantee by Syarikat Jaminan Pembiayaan Perniagaan Bhd
• The tax rate for companies with a taxable income of up to RM500,000 and SMEs with a paid up capital of less than RM2.5 million will be reduced to 17 per cent from 18 per cent
• Exim Bank will offer credit facilities and Takaful protection of RM12 billion for SME importers
• An allocation of RM100 million to improve the capabiltiies of the SME industry in the halal sector
• A Shariah compliant Financing Scheme of RM1 billion will be provided to finance halal product exporters by financial institutions at the profit subsidy rate of 2 per cent
• Permodalan Usahawan Nasional Bhd will make available an allocation of RM200 million for the retail and wholesale industry as well as to rent business premises
• RM20 million has been allocated for the "Buy Malaysian Goods” campaign
• Government will allocate RM2.46 billion to upgrade and rehabilitate railway tracks
• An allocation of RM25 million is being made available for the Kota Perdana Special Border Economic Zone at Bukit Kayu Hitam, Kedah
• Land of 380 acres at Pulau Indah will be transformed into a Free Trade Zone and linked to the Port Klang Free Zone
• The government will implement the Biodiesel B10 programme for the transport sector and B7 for the industrial sector in 2019
• An allocation of RM30 million will be provided to assist oil palm smallholders obtain the Sustainable Palm Oil (MSPO) certification
• RM100 million is allocated for the use of Cuplump Modified Bitumen technology for the construction of roads in investment and industrial areas in stages
• A Rubber Production Incentive with an allocation of RM50 million to assist in reducing the impact of the fall in rubber prices on smallholders
• RM47 million is allocated for Research & Development (R&D) to enhance seed productivity, cereals and fruits, RM18 million for automation of the agrofood industry and RM52 million for entrepreneur programmes and agro industry training
• The government is offering a Pioneer Status incentive of 70 per cent or Investment Tax Allowance of 60 per cent for five years for companies that manufacture environment friendly plastics that are bio-resin and bio-polimer based
• A fund of RM2 billion is available for the Green technology Financing Scheme with the government bearing the interest rate subsidy of two per cent for the first five years
• The 2019 Budget sees an allocation of RM314.5 billion for expenditure compared to RM290.4 billion in 2018
• A total of RM259.8 billion is for administration expenses and RM54.7 billion as development expenditure.
• Contingencies are set at RM2.0 billion.
• The economic sector has received the highest allocation of RM29.2 billion, the social sector (RM15.2 billion, security sector (RM7.1 billion) and general administration (RM3.2 billion). — Bernama