KUALA LUMPUR: The RM44bil East Coast Rail Link (ECRL) is expected to contribute 2.7% to Malaysia’s economic growth, according to MIDF Research.
It said the boost for growth is expected to kick-in from project inception until its completion.
“However, the full estimated gross domestic product (GDP) contribution will depend on the pace of spillover effects to other economic sectors. In addition, compensation of employees and net operating surplus are projected to rise by 3.6% and 2.1% respectively.
“As the project requires machinery and transport equipment, our estimate shows imported commodities and consumption of fixed capital to increase by 3.3% and 2.1% respectively,” it said in a research note.
Moving forward, MIDF Research said the railway project would affect economic expansion through both direct and indirect medium in the long run, partly by jobs creation, opening-up of new areas, foreign direct investment, increasing external trade activities and strengthening domestic demand.The research house expected that since 70% of the transportation would be for freight purposes, the project would be a catalyst for industries and exporters in Malaysia.
“Plus, it gives Malaysia an advantage in international trade due to the project’s strategic locations to China and Asean nations.
“On the other hand, improvement in transportation and connectivity will assist Malaysia in terms of better resources allocations, upgrade in productivity, increase in mobility and improving socio-economic developments economies which partly facilitate China’s Belt and Road initiative,” it said. — Bernama