‘Services sector will contribute to 58% of GDP by 2020’

PUTRAJAYA: Malaysia is on the right path to expanding its services sector to 58% of the Gross Domestic Product (GDP) by 2020, said Datuk Seri Abdul Wahid Omar.

Last year, the sector contributed 55% to the GDP, said the Minister in the Prime Minister’s Department, adding that the 58% target was “within reach”.

“In terms of direction, we are definitely on the right path. It’s an achievable target,” he said after announcing the first quarter report of the index of services for 2015 at the Department of Statistics headquarters here.

“Although in most advanced countries, the services sector contributes 70% to the GDP, we believe the 58% target is suitable for Malaysia as a developing nation,” he added.

“The Services Sector Blueprint that was recently launched by the Prime Minister has strategies that will also help achieve this target,” said Abdul Wahid.

He said Malaysia was “privileged” as it had natural resources that allowed it to diversify its economy.

The index of services, an indicator to measure short-term changes in the service sector, rose by 7.1% to 132.2 in the first quarter of 2015 compared with the same quarter last year.

Abdul Wahid said the increase was driven by the growth of several sub-sectors such as communication and, transport and storage (8.5%), distributive trade, food and beverages, and accommodation (8.4%), other services (6.6%) and finance, real estate and professional (4%).

“The professional sub-sector, for example, saw an increase of 11.5%,” Abdul Wahid said.

“This can be attributed to the preparations of business owners for the Goods and Services Tax where accounting services are highly sought after.”