KUALA LUMPUR: The economy is on track to grow between 5% and 5.5% per annum for the remainder of the 12th Malaysia Plan (12MP), driven by domestic demand, particularly private sector expenditure.
According to the mid-term review of the 12MP (12MP MTR) 2021-2025 report, tabled in Parliament yesterday, the gross national income (GNI) per capita in current prices is projected to increase by 4.6% per annum to RM61,000 or US$14,250 in 2025.
Malaysia’s potential output is projected to expand between 5.5% and 6% per annum under the 12MP attributed to higher productivity.
During the review period of 2021-2022, the report stated that potential output expanded by 3.8% per annum, while gross domestic product or GDP grew by 5.9% per annum, contributed by better labour productivity growth of 3.7% per annum.
In 2023, the economy is projected to expand close to the lower end of the 4% to 5% range.
“Inflation elevated to 3.3% in 2022. GNI per capita in current prices was higher at RM52,968 (US$12,035) in 2022 compared with RM42,838 (US$10,191) in 2020.
“During the review period, seven out of the 12 macroeconomic targets were achieved, four are on track, while the remaining one is lagging. In addition, four out of the eight multi-dimensional goals were achieved,” it said as reported by Bernama.
The report said private consumption is anticipated to increase at an average annual rate of 6.1%, supported by the improvement in labour market conditions with the economy to remain in full employment and the inflation rate expected to remain manageable.
Meanwhile, the construction sector is expected to rebound supported by stronger growth in the civil engineering and residential building sub-sectors.
On sectoral reforms, the report said it would be accelerated by boosting the high-growth, high-value (HGHV) industries related to energy; technology and digitalisation; electronics and electrical; agriculture and agro-based; and non-radioactive rare earth.
“These five HGHV industries have been identified as part of the Big Bolds in the 12MP MTR. The implementation of the reform through these Big Bolds is expected to support the targeted growth of all sectors,” it said.
The report also stated that the services sector is expected to grow at an annual average rate of 5.7%, particularly led by consumer-related activities such as in the retail trade, accommodation, and food and beverage sub-sectors.
It added that efforts would also be undertaken to increase the contribution of the modern services sub-sector by focusing on the information and communications technology services industry and leveraging on financial technology, as one of the initiatives under the Big Bold Digital and Technology-based HGHV Industry.
Meanwhile, the report stated that the electricity sub-sector will be enhanced by increasing renewable energy capacity with a target of 31% in 2025.
