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Highlights of 2016/2017 Economic Report

  • Malaysian economy to expand 4.0-5.0 per cent in 2017 given the nation's strong economic fundamentals coupled with the 2017 Budget strategies and programmes. Photo courtesy: Sin Chew Daily

KUALA LUMPUR, Oct 21 (Bernama) -- Following are the highlights of the 2016/2017 Economic Report issued by the Finance Ministry in conjunction with the tabling of the 2017 Budget by Prime Minister Datuk Seri Najib Tun Razak, who is also Finance Minister, in the Dewan Rakyat today.

- Malaysian economy to expand 4.0-5.0 per cent in 2017 given the nation's strong economic fundamentals coupled with the 2017 Budget strategies and programmes.

- Growth to emanate from domestic demand, particularly private consumption and private investment expenditures, which is expected to expand 6.3 and 5.8 per cent, respectively, in 2017.

- Savings-investment gap is expected to narrow to 0.5-1.5 per cent in 2017 in tandem with higher investment activities.

- Inflation to remain manageable in 2017 while the economy continues to operate under full employment.

- All economic sectors expected to contribute to growth, with the services and manufacturing sectors spearheading the expansion in 2017.

- Fiscal deficit expected to improve further to 3.0 per cent (RM40.3 billion) of GDP in 2017. (2016: 3.1 pct; RM38.7 bln).

- Govt revenue collection up 3.4 per cent to RM219 billion in 2017, contributed by a higher tax revenue collection largely from companies' income tax.

- Non-oil related revenue will be major contributor to total revenue in 2017 with a share of 86.2 per cent, attributed mainly to higher goods and services tax collection of RM40 billion.

- Malaysia to continue promoting economic growth and implement people-centric programmes and projects in 2017.

- Federal government expenditure is expected to increase 3.4 per cent to RM260.8 billion in 2017 from RM252.1 billion this year; 82.4 per cent (operating expenditure) and the remaining (development expenditure).

- Emoluments, the largest component of operating expenditure, will receive an allocation of RM77.4 billion in 2017.

- Subsidies and social assistance will continue to be provided with an allocation of RM22.4 billion in 2017.

- RM46 billion will be allocated for development expenditure in 2017; 56.2 per cent for the economic sector, social (26.5 per cent), security (11.5 per cent) and general administration (5.8 per cent).

- Allocation for the economic sector in 2017 will be utilised mainly for upgrading physical infrastructure; improving telecommunication and energy infrastructure particularly in rural areas.

- A sum of RM12.2 billion will be allocated to the social sector to provide better quality of life for the people in 2017.

- Security sector comprising defence and internal security will be provided RM5.3 billion in 2017.

- For the general administration sector, RM2.7 billion will be allocated for upgrading government facilities and information and communications technology nationwide in 2017.

- Malaysian economy continued to grow by 4.1 per cent in the first half of 2016 mainly supported by strong domestic economic activities.

- The country's GDP estimated to expand between 4.0 and 4.5 per cent this year with both household consumption and total investment remaining resilient.

- Malaysia is committed to achieving a near balanced budget by 2020.

- Malaysia's total trade in expected to reach RM1.5 trillion in 2016.

- Domestic demand to remain key growth driver in 2016, expanding 4.7 pct.

- Net foreign direct investment inflows totalled RM23.8 billion in the first half of 2016 compared with RM26.7 billion in the same corresponding period 2015.

- Domestic investors contributed 68.1 per cent to the RM88.5 billion investments approved in the first half of 2016.

- CPO price expected to average around RM2,500 per tonne this year, given the expected improvement in output and weather condition.

- Subsidies to decline 9.6 per cent to RM24.6 billion this year due to government's commitment to subsidy rationalisation.

- Government expenditure to focus on programmes and projects with a high multiplier effect on the economy.

- Operating expenditure to decline 4.5 per cent to RM207.1 billion this year following measures to optimise and rationalise supplies, services, grants, subsidies and asset purchase.

- Malaysia's monetary policy continues to focus on price stability and sustainable growth, given the risks in the global economy.

- Malaysia leads in global sukuk, accounting for 53.4 per cent or US$180 billion of the global sukuk outstanding as at end-June 2016.

- Malaysian banking system disbursed RM598.5 billion in loans the first seven months of 2016.

- Islamic banking industry grew significantly over the last five years with assets rising to RM685.4 billion compared with RM351.2 billion as at end-2010.

- Total Islamic deposits and investment accounts of the Islamic banking system up 9.6 per cent to RM580.7 billion during Jan-July 2016.

 

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