The Malaysian economy is expected to strengthen further and projected to grow at a faster rate of 4.5% to 5.5% in 2013 supported by improving exports and strong domestic demand.
In the Economic Report 2012/2013 released by the Ministry of Finance (MoF) last Friday, it said the assumption was based on the global growth that will pick up especially during the second-half of 2013 (2H13). It said that it was also premised upon the expectation of an improvement in the resolution of a debt crisis in the euro-area and stronger growth in the economies of Malaysia’s major trading partners.
The Economic Report 2012/2013 was released in conjunction with the national Budget 2013 that was presented by the prime minister last Friday. It said that given that the domestic economy is expected to strengthen further in 2013; inflation is estimated to increase moderately mitigated by further capacity expansion in the economy. On the supply side, growth in 2013 is expected to be broad-based supported by expansion in all sectors of the economy.
Of significance, the external trade-related industries are envisaged to benefit from stronger global growth, particularly during the 2H13. It said that the services and manufacturing sectors are expected to contribute 4.2 percentage points to the gross domestic product growth.
MoF said that the prospects in the services sector are expected to remain upbeat in 2013, with the accelerated implementation with major initiatives under the National Key Result Areas and continued investment in the seven services subsectors under the National Key Economic Areas. It said that these initiatives are expected to drive the wholesale and retail trade, finance and insurance, and communication subsectors, which are expected to grow 6.8%, 5.2% and 8.2% (2012 :5.7%; 4.2%; 9.3%) respectively.
On the value-added of the manufacturing sector, MoF said that it is expected to grow 4.9%, (2012 :4.2%) with export oriented industries...