Domestic demand to grow by 4.8% next year

DOMESTIC demand is expected to grow by 4.8% in 2019 after registering a 5% rise this year, driven by private sector expenditure that is slotted to rise by 6.4% next year and 6.5% in 2018.

Public sector expenditure is expected to decline by 0.9% in 2019 after growing marginally by 0.1% this year mainly due to lower consumption by public corporations.

From the private side, consumption will remain the major growth driver with higher household earnings, from better employment prospects, the implementation of the higher minimum wage, steady commodity prices and accommodative financing conditions.

Major conferences and promotional activities ahead of Visit Malaysia 2020 are expected to spur spending. In 2019, private investment is projected to grow by 5% attributed to capital spending in technology-intensive manufacturing and services sectors.

As Malaysia moves towards Industrial Revolution 4.0, investments in the Internet of Things, software, advanced electronics, smart machinery, automation and robotics, automated guided vehicles, aerospace and medical devices are expected to increase.

Public consumption is expected to rise by 1.8% in 2019 on account of higher spending on emoluments as well as supplies and services. Public investment is projected to fall by 1.5% and 5.4% this and next year, respectively from lower capital spending by public corporations.