MIER projects all sectors of the economy to grow this year

A worker is seen at a construction site, with the landmark Petronas Twin Towers in the background, in Kuala Lumpur September 12, 2013. According to MIER, the construction sector is expected to grow 5.0 per cent this year compared with 4.2 per cent in 2018. — Reuters pic
A worker is seen at a construction site, with the landmark Petronas Twin Towers in the background, in Kuala Lumpur September 12, 2013. According to MIER, the construction sector is expected to grow 5.0 per cent this year compared with 4.2 per cent in 2018. — Reuters pic

KUALA LUMPUR, April 16 — The Malaysian Institute of Economic Research (MIER) has projected that all sectors contributing to Malaysia’s gross domestic product (GDP) will grow in 2019.

In its Malaysian Economic Outlook: First Quarter 2019 Update report released today, MIER said the services sector is forecast to grow moderately 5.5 per cent this year, down from 6.8 per cent in 2018, and would remain the largest contributor to GDP growth.

It said the sector is anticipated to continue benefiting from a cheaper ringgit and gained from strong investment 2019.

“About half of (Malaysia’s) approved investments were for services sector projects, creating more than 68,800 new employments,” it said.

MIER said the manufacturing sector, the second largest contributor to GDP, is expected to grow 4.6 per cent in 2019, down from 5.0 per cent last year as interim data pointing to a sluggish manufacturing performance due to slower global demand growth.

It said slower growth in global demand was attributed to a slower than expected growth in some major economies and this was amplified by the growing protectionist sentiment around the world, especially with the heightened US-China trade war.

Meanwhile, MIER said the agriculture, mining and quarrying, and construction sectors in 2019 are expected to grow at a faster pace compared with the previous year.

The agriculture sector is projected to grow 1.3 per cent this year, partly due to demand for crude palm oil (CPO) driven by an increase in demand for biodiesel and the depressed value of ringgit, compared with a contraction of 0.4 per cent in 2018.

The mining and quarrying sectors, MIER said, is expected to grow 1.3 per cent for the next two years, up from a 1.5 per cent contraction last year.

The construction sector is expected to grow 5.0 per cent this year compared with 4.2 per cent in 2018.

In terms of contribution to the GDP growth, the services sector is expected to contribute the most to growth with 3.1 percentage points (ppts) followed by the manufacturing (1.1 ppts), construction (0.2 ppt), agriculture (0.1 ppt), and mining and quarrying sectors (0.1 ppts) sectors. — Bernama