Malaysia's 2019 Budget Highlights

KUALA LUMPUR, Nov 2 (Bernama) -- The following are the highlights of the Economic Outlook 2019 report, the first presented under Malaysia’s Pakatan Harapan (Alliance of Hope) government. The 142-page report was released by the Ministry of Finance in conjunction with the tabling of the 2019 Budget on Friday by Finance Minister Lim Guan Eng (picture) in Parliament. (US$1 = RM4.17) 1. Global economy to expand 3.7 per cent in 2018 and 2019, lower than the earlier forecast of 3.9 per cent by the International Monetary Fund 2. Global trade to widen by 4.2 per cent in 2018 and 4.0 per cent in 2019 (2017:5.2 per cent) 3. Malaysia’s real Gross Domestic Product to increase 4.8 per cent and 4.9 per cent in 2018 and 2019, respectively, steered by sustained private sector expenditure 4. Private sector growth expenditure is expected at 6.5 per cent this year and 6.4 per cent in 2019, constituting about 72 per cent of the Gross Domestic Product 5. Private consumption to remain the major growth determinant in 2019, expanding 7.2 per cent, supported by a stable labour market, benign inflation and conducive financing conditions 6. Private investment to post a higher growth of 5.0 per cent in 2019, attributed to capital spending in technology-intensive manufacturing and services sectors 7. Public consumption to expand 1.8 per cent in 2019 on account of higher spending on emoluments, as well as, supplies and services 8. Public investment to decline 1.5 per cent and 5.4 per cent in 2018 and 2019, respectively, mainly weighed down by public corporations’ lower capital spending 9. Gross National Income to widen 7.1 per cent to RM1.5 trillion in 2019; private sector will account for 86.9 per cent of total savings while Gross National Savings will grow 3.4 per cent 10. Total investment to increase 5.0 per cent to RM366.8 billion in 2019, leading to lower savings-investment surplus, ranging between two per cent and three per cent of Gross National Income 11. Current account surplus to shrink 2-3 per cent in 2019 of Gross National Product (2018: 2.5-3 per cent) 12. Gross exports to grow 3.9 per cent in 2019; imports anticipated to grow 4.1 per cent 13. Travel account surplus to be higher at RM28.2 billion in 2019 driven by continued tourist arrivals 14. Primary income account to register a higher deficit at RM41.4 billion, mainly due to higher profits expected by locally-incorporated multinational companies, a larger net outflow of compensation to foreign professional skills and expertise 15. Manufacturing sector to expand 4.7 per cent in 2019, primarily driven by continuous demand for electrical and electronics 16. Construction sector to improve slightly in 2019, expanding 4.7 per cent following an increase in new planned supply in affordable houses and industrial segments 17. Agriculture sector to turn around next year with a 3.1 per cent growth from a 0.2 per cent decline expected in 2018 18. Oil palm to register a 4.1 per cent growth in 2019 on higher output, price improvement to RM2,400 per tonne (from an average of RM2,300 in 2018), and an increase in matured areas, which are set to reach 5.5 million hectares 19. Crude palm oil closing stocks to decline by 2.2 million tonnes in 2019 due to higher exports to major trading partners -- BERNAMA