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10MP: Services sector leads economic growth
Thursday, 28 May 2015 00:00

The services sector, which continues to be the primary driver of economic growth in the 10th Malaysia Plan (10MP) (2010-2015), is expected to expand 6.3% per annum and contribute 53% to gross domestic product (GDP).

The growth in the sector was supported largely by the wholesale and retail trade, finance and insurance, and communications sub-sectors.

“Labour productivity in the services sector is estimated to increase at an average rate of 2.8% per annum, mainly contributed by the information and communications technology (ICT), real estate and business, finance and insurance, and transport and storage sub-sectors,” the Economic Planning Unit (EPU) of the Prime Minister’s Department said in the 11th Malaysia Plan.

Prime Minister Najib Abdul Razak tabled the five-year (2016-2020) plan in the Dewan Rakyat today.

EPU said the sector continued to be the main source of employment, providing 8.4 million jobs or 60.9% of total employment, while exports of services is estimated to grow 5.6% per annum to reach 18% of total exports this year.

EPU said the ICT industry, including e-commerce, is estimated to contribute 16.8% to gross domestic product (GDP) this year, while the ICT services sub-sector contribution to the GDP is estimated to increase from 5.2% in 2010 to 5.5% in 2015.

However, it said the ICT manufacturing sub-sector contribution is estimated to decrease from 4.6% in 2010 to 3.9% this year, reflecting the transition of the ICT sector from manufacturing towards higher value-added services.

On the tourism industry, it said Malaysia continued to be one of the world’s leading tourist destinations with tourist arrivals increased from 24.6 million in 2010 to 27.4 million in 2014.

“Tourism remains an important source of foreign exchange earnings at RM72 billion in 2014, an increase of 27.4% from RM56.5 billion in 2010,” it said, adding that the industry provided 2.2 million jobs or 16.8% of total employment in 2013.

Apart from services, other major economic sectors such as manufacturing, agriculture, construction, and small and medium enterprise were also expected to record growth of 4.8%, 2.4%, 11.1%, and 7.5% per annum respectively, during the 10MP.

It said manufactured goods dominated exports, contributing RM636.7 billion or 81.8% of total exports in 2015.

“The growth of the sector was contributed largely by the electrical and electronic (E&E) and chemical sub-sectors.

“The value added E&E increased from RM44.2 billion in 2011 to RM53.8 billion in 2015, partly due to new applications for semiconductors in digitalisation, mobility, connectivity, energy efficiency, and miniaturisation,” it said.

It said chemical sub-sector recorded an average growth of 3.4% per annum with an increase in value added from RM24.8 billion in 2011 to RM27.8 billion this year as chemical products were important inputs to fast-growing industries such as automotive, E&E, pharmaceuticals, and construction.

EPU attributed the performance to strong demand from ASEAN member states and Free Trade Agreement partners.

Source : dated 28 May 2015