Govt to focus on sectoral growth, structural reforms

PETALING JAYA: Strengthening sectoral growth and structural reforms, including small and medium enterprises (SMEs), will be the key focus of the Pakatan Harapan-led government to support economic expansion for the remaining part of the 11th Malaysia Plan (11MP) from 2018-2020.

In this regard, the government will intensify its efforts in four key strategies – productivity improvements to increase competitiveness, increasing export capacity to enhance internationalisation, improving market efficiency to promote fair competition, and facilitating ease of doing business to improve business climate.

Overall, the government aims to grow the country’s gross domestic product (GDP) by 4.5%-5.5% annually between 2018 and 2020.

Under the previous Barisan Nasional administration, which lost power following the May 9 poll, the target of the 11MP was to grow the country’s GDP at 5%-6% per annum from 2016-2020.

According to the mid-term review of the 11MP, Malaysia’s economy grew at an annual average of 5.1% from 2016-2017.

For the remaining part of the 11MP, the services sector will continue to be the primary driver of economic growth.

After growing at an annual 5.9% from 2016-2017, this sector’s growth is expected to accelerate to 6.9% per year from 2018-2020. This compared with the original annual growth target of 5.9% for the entire period of 11MP.

The manufacturing sector, on the other hand, is expected to grow 4.5% per year from 2018-2020, after growing at an annual 5.2% from 2016-2017. The original annual growth target for the manufacturing sector was 5.1% from 2016-2020.

For the remaining part of the 11MP, the manufacturing sector will continue to be transformed towards producing more high value-added, diverse and complex products.

The catalytic subsectors – the electrical and electronics, machinery and equipment as well as chemicals and chemical products would remain as priority subsectors, the government said.

As for the agriculture sector, modernisation efforts will be continued by reforming the agro-food subsector and enlarging the share of the subsector to total agriculture value-added.

The agriculture sector is expected to see faster growth at 2% annually from 2018-2020, compared with a meagre 0.8% annual expansion from 2016-2017. Originally, the sector was expected to expand 3.5% each year from 2016-2020.

Notably, the construction sector is expected to slow down to an annual growth of 4.3% from 2018-2020, from 7.1% in 2016-2017, and compared with the original annual growth target of 10.3% from 2016-2020.

Meanwhile, the development of SMEs will remain a priority to achieve inclusive and balanced growth.