KUALA LUMPUR, Oct. 11 (Xinhua) -- The Malaysian economy is expected to grow by 4.7 percent in 2019 and 4.8 percent in 2020 amid external headwinds, said its economic outlook report released on Friday.
Malaysia's Finance Minister Lim Guan Eng said in the report that the growth is underpinned by resilient domestic demand, particularly household spending following stable labor market and low inflation.
Malaysia's gross domestic product (GDP) expanded by 4.7 percent in the first half of the year. The government earlier projected the economy to grow between 4.3 percent and 4.8 percent this year.
According to the report, private sector expenditure will remain the key driver of growth with private consumption and investment rising 6.8 percent and 1.5 percent in 2019, respectively. The growth rates are anticipated to improve to 6.9 percent and 2.1 percent in 2020, respectively.
Public sector expenditure, however, is estimated to decline by 1.8 percent in 2019, weighed down by lower investment spending. The growth will likely to rebound 0.8 percent in 2020, driven by revival of strategic projects.
Amid global trade tensions, Malaysia's gross exports this year are estimated to expand by only 0.1 percent. The gross exports growth rate is expected to improve to 1 percent due to potential improvement in global trade activities and the uptick in the electrical and electronics cycle.
Underpinned by resilient domestic demand, services sector, which constituting about 58 percent of GDP, is projected to grow 6.1 percent and 6.2 percent in 2019 and 2020, respectively.
Dragged by global trade tensions, manufacturing sector is likely to grow at a slower pace of 4 percent and 4.1 percent in 2019 and 2020, respectively.
The agriculture sector is expected to accelerate by 4.3 percent this year on rebound in palm oil production and natural rubber. But growth is expected to be at a slower pace of 3.4 percent next year.
The construction sector is expected to expand only 1.7 percent this year weighed down by subdued growth of the residential and commercial properties. However, the growth is likely to be at a higher pace next year due to acceleration and revival of mega projects and building of affordable homes.
The mining sector is forecast to turn around 0.6 percent this year driven by higher production of natural gas, but the growth rate is anticipated to slow down to 0.3 percent next year.
