KUCHING: The state economy experienced a modest growth at 3.2 per cent in 2016.
According to Second Minister of Finance Dato Sri Wong Soon Koh, last year’s figures were affected by global uncertainties and lower commodity prices.
However, he said that the state economy is expected to expand by 3.5 per cent to 4 per cent this year; driven by expansion in private sector expenditure and exports with the services and manufacturing sectors continuing to be the key drivers of growth.
Wong said this in his winding-up speech during the State Legislative Assembly sitting yesterday.
“On the supply side, the services sector grew at a moderate rate of 5.3 per cent last year supported mainly by consumption-related services.
“Growth in the wholesale and retail sub-sectors eased at 6 per cent in tandem with slower demand on consumer durable goods and transport vehicle segments.
“The utilities sub-sector recorded a growth of 6.5 per cent, following higher consumption of electricity and water demand in 2016,” he said.
Wong added that the accommodation and restaurants sub-sector grew at 8 per cent in 2016 and estimated to grow at 6.4 per cent in 2017, the manufacturing sector expanded at 4.8 per cent in 2016 and expected to grow at 4 per cent in 2017, the construction sector grew at 15 per cent in 2016 and expected to grow by 12 per cent in 2017, the agriculture sector contracted at 1.1 per cent in 2016 and expected to grow at 1.9 per cent, and the mining sector declined by 0.3 per cent in 2016 but expected to grow at 6 per cent.
“On the demand side, private consumption growth is sustained at 4.5 per cent in 2016 as consumers are more cautious on the back of rising household debts and prices.
“Households continue to make expenditure adjustments to the environment of higher prices, uncertainties, and the Ringgit depreciation.
“Nevertheless, government measures such as increment in salary of civil servants, reduction in employees; EPF contributions from 11 per cent to 8 percent, and higher BR1M payouts had supported household spending.
“For 2017, private consumption is projected to improve and grow by 6.6 per cent sustained by continued wage growth, increase in disposable income, and improved global commodity prices.
“Public consumption expanded moderately at 7.1 per cent in 2016 due to increased spending on emoluments.
“For 2017, public consumption is estimated to expand at 1.4 per cent, underpinned by lower spending on supplies and services,” he said.
As for investments, Wong revealed that private investment registered a growth of 6.6 per cent last year and for this year, it is expected to grow higher by 9.5 per cent; supported by the implementation of ongoing and new projects.
“Public investment grew at 1.7 per cent in 2016 and expected to expand by 6.8 per cent driven by capital spending by public enterprises in the transportation, utilities, oil and gas and communications sectors.
“As for external trade, the state total trade remained firm at RM116.4 billion despite a more challenging external environment in 2016,” he said.
Talking on inflation, Wong said that last year’s figure was slightly higher at 1.6 per cent as compared to 1.4 per cent in 2015.
He explained that this was large due to price increases in alcoholic beverages and tobacco by 14.1 per cent; housing, water, electricity, gas, and other fuels by 2.5 per cent, and education by 1.9 per cent.
“This year, however, inflation is expected to remain below 3 per cent,” he said.
