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Malsaysia: Economic Reports 2017/18: Private sector to drive domestic demand
RESILIENT domestic demand is expected to underpin the GDP growth outlook due to an expected increase in private sector spending – in terms of expenditure and investment – though at a slower pace from 2017.
Domestic demand is expected to grow at a slower pace of 5.5% from 6.4%. Private sector spending will underpin the growth as its contribution increases to 72.9% of GDP from 71.4%.
The stronger performance of the private sector amid the favourable external environment will enable the public sector to progressively consolidate its financial position.
Private sector expenditure is to grow at a slower pace of 7.3% from 7.4% due to sustained spending in private consumption and investment activities.
Private sector consumption is expected to grow slightly slower at 6.8% from 6.9% due to higher income with stable labour market conditions, higher export earnings and firmer commodity prices.
Private investment is anticipated to expand at a slightly slower pace of 8.9% from 9.3%. It will also account for a larger share of the GDP at 18.1% from 17.5%.
The government expects strong capital spending in the services sector, particularly in transport and storage, information and communication, and tourism-related industries.
As for the manufacturing sector, investments will be focused on electrical and electronic (E&E), aerospace, machinery and equipment.
Meanwhile, public sector expenditure is expected to dip 0.4% due to lower public investment which is projected to contract 3.1% due to lower capital outlay by public corporations.
Federal Government development expenditure is expected to remain stable at RM46bil as most of the funds will go towards constructing and upgrading infrastructure facilities in rural areas to boost human capital development.
Public consumption is expected to increase at a slower pace of 1.3% from 2.7% in line with the government’s move to reprioritise and rationalise non-critical expenditure.
Source: http://www.thestar.com.my/business/business-news/2017/10/27/private-sector-to-drive-domestic-demand-in-2018/#KvrqYx5pP5Q3y4Px.99