HOW OUR ECONOMY WILL FARE IN 2020


	Malaysian economy to grow 4.8% in 2020 vs 4.7% in 2019. The stronger growth is underpinned by resilient domestic demand, particularly household spending thanks to stable labour market and low inflation.

Economic Report 2019/2020 Highlights

The federal government’s debt stood at RM799.1 billion, or 52.7% of gross domestic product, compared with RM741.05 billion in 2018. The increase in national debt was mainly to finance the budget deficit to stimulate economic growth.

Has the country's debt situation improved?

Civil servants’ emoluments to exceed RM82 billion

Civil servant pension will cost RM27.1 billion  

Govt to spend RM24.2 billion on subsidies and social assistance

Higher development expenditure of RM56 billion

How the Government intends to spend in 2020

Economic growth at 4.8% in 2020 vs 4.7% in 2019
	Only 1% growth in exports in 2020
	Current account surplus to narrow to 1.9% of GNI
	2% inflation in 2020, lifted by the introduction of targeted fuel subsidy
	Unemployment rate to remain healthy at 3.3% in 2020

How will our economy fare in 2020?

Malaysia's current account surplus is expected to decline to RM29 billion in 2020 from the estimated RM43.4 billion in 2019, as import growth outpaces export rise, according to the Ministry of Finance's (MoF) Economic Outlook 2020 report.

Malaysia current account surplus seen at RM29b in 2020 versus RM43.4b in 2019

The 2020 Budget deficit target has been revised to 3.2% of GDP, which is slightly higher than 3% originally announced in the 2019 Budget.

However, the overall deficit in 2020 is expected to be lower compared with 3.4% in 2019 with fiscal consolidation remaining on its trajectory and the debt position at a manageable level.

Federal Govt widens 2020 fiscal deficit target to stimulate growth

The overall household debt increased slightly to RM1.22 trillion, accounting for 82.2% of the nation's gross domestic product (GDP) as at end-June 2019, says the Ministry of Finance (MoF) in its Economic Outlook 2020 report.

Household debt increases slightly to RM1.22 tril

Lower public revenue in 2020 in absence of Petronas special dividend
	Government expects RM26.8 billion SST collection in 2019
	Government's tax revenue up 3.4% to RM180 billion in 2019
	With weakening growth in government revenue, tax reforms necessary

How will the government fill the nation’s coffers?

The Government’s revenue for 2020 to 2022 is expected to be RM764.9 billion or 15% of the nation’s gross domestic product (GDP).

Petroleum-related revenue is projected to be RM149.2 billion or 2.9% of GDP, while non-petroleum revenue is expected to contribute RM615.7 billion or 12% of GDP, said the Ministry of Finance in the 2020 Fiscal Outlook and Federal Government Revenue Estimates report

Govt revenue for 2020 to 2022 set to be 15% of GDP

The consolidated general government revenue for 2019 is estimated to increase by 11.3% to RM312.7 billion, while consolidated operating expenditure (OE) is estimated to increase by 13.5% to RM301.5 billion, according to the Ministry of Finance (MoF).

General government refers to institutional units that perform the princpal economic functions of government

Malaysia's general govt revenue to rise 11.3% to RM312.7 bil in 2019

Total debt, liabilities expanded to 77% of GDP, versus 75.4% of GDP as at end-2018
	Fed govt debt grew RM58.1 billion in the half-year period
	Committed guarantees increased RM24.6 billion   
	RM8.9 billion extended to 1MDB for debt servicing as at end-June

Malaysia's total debt, liabilities rose to RM1.17 tril as at end-June

Service sector to be the fastest-growing sector of the economy
	4.1% growth in the manufacturing sector in 2020
	Agriculture sector to grow the slower pace at 3.4%
	Stronger growth of 3.7% in construction sector in 2020, vs 1.7% in 2019
	Mining sector growth to moderate to 0.3%

Services to be fastest growth sector in 2020, construction sector sees strong recovery

Service sector to be fastest-growing sector of economy in 2020
	4.1% growth in manufacturing sector
	Agriculture sector to grow slower at 3.4%
	Stronger growth of 3.7% in construction sector in 2020 versus 1.7% in 2019
	Mining-sector growth to moderate to 0.3%

Faster growth projected for service sector in 2020, with strong rebound in growth of construction sector

Access to financing continues to be a challenge for small and medium enterprises (SMEs) and start-ups due mainly to inadequate cash flow to meet repayment obligations, according to the Ministry of Finance's (MoF) Economic Report 2019/20.

Additionally, SMEs and start-ups are also facing issues with the complex application processes, insufficient collateral and documentation, as well as high risks related to business ventures.

Lack of financing, tight cash flow among problems faced by SMEs

SARAWAK expects to formalise a deal to raise its stake in Affin Bank Bhd to about 30% in about a month, according to the state’s premier Tan Sri Abang Johari Openg.

In an exclusive interview with The Edge in Kuala Lumpur last Friday (July 19), Abang Johari said the state is committed to...

Premier: Sarawak expects to ink S&P on Affin Bank deal in a month

Treasuries are rising at the end of a volatile week as the Federal Reserve’s favourite inflation gauge cemented traders’ expectations for an interest-rate cut in September.

The advance pushed yields lower across the curve on Friday, with two- and 10-year yields down by about five basis points (bps) to 4.38% and 4.2%, respectively.

Treasuries rally as data points to a September rate cut

The developer of a supertall condo tower in Miami’s Brickell neighbourhood has hired a new sales team after ousting an embattled real estate brokerage from the project.

One Sotheby’s International Realty has taken over marketing at 888 Brickell Dolce & Gabbana Miami, JDS Development’s pre-construction building overlooking Biscayne Bay in the city’s financial centre.

Miami condo tower moves on from brokers facing rape allegations

Deputy Prime Minister Datuk Seri Fadillah Yusof paid a courtesy visit to Vietnamese Prime Minister Pham Minh Chinh on Friday.

"During the meeting with His Excellency, I reaffirmed the commitment of the prime minister and the Malaysian government to continue strengthening cooperation between Malaysia and Vietnam," he said in a post on the social media platform X.

Deputy PM Fadillah pays courtesy visit to Vietnamese PM, strengthens bilateral cooperation

Wall Street bounced back on Friday as megacap tech and chip stocks recovered from the week's pummeling, while a largely in-line key inflation reading kept bets for an early start to interest-rate cuts alive.

Wall Street rebounds on tech recovery, small caps jump after benign inflation data

Malaysia has urged dialogue partners attending the Asean Post-Ministerial Conference in Laos to support a ceasefire in Gaza and end the brutal killings of Palestinians.

Foreign Minister Datuk Seri Mohamad Hasan said Malaysia, along with Indonesia and Brunei, brought forward this motion during the meeting at the National Convention Centre (NCC) here.

Malaysia urges Asean dialogue partners to support ceasefire in Gaza

US authorities filed criminal and civil charges against prominent activist short seller Andrew Left for an alleged long-running market manipulation scheme involving bets on stocks including Nvidia and Tesla, they said on Friday.

US charges Citron's Andrew Left over alleged multi-million fraud scheme

Malaysia, as the country coordinator for Asean-China Dialogue Relations, will intensify efforts to finalise the Code of Conduct in the South China Sea, said Foreign Minister Datuk Seri Mohamad Hasan.

He said Malaysia, which assumed the role of country coordinator this year, aims to establish a code of conduct accepted by all parties.

Malaysia steps up efforts to finalise South China Sea code of conduct

Here is a brief recap of some business news and corporate announcements that made the headlines on Friday.

AirAsia X, Capital A, Hibiscus, Dagang NeXchange, ViTrox, Ekovest, Knusford, Alam Maritim, Datasonic, Kumpulan Kitacon, DXN, Homeritz, Westport, MGRC 

VIENTIANE (July 26): The Asean Post Ministerial Conference kicked off in the Laos capital here on Friday, as Asean foreign ministers engaged with top diplomats from dialogue partners to discuss various regional and international issues of common interest.

Asean Post Ministerial Conference kicks off in Laos; regional, global issues in focus

Here is a brief recap of some business news and corporate announcements that made the headlines on Friday.

Ekovest Bhd (KL:EKOVEST) said it has agreed to a further extension of time to discuss a merger between its wholly owned subsidiary Ekovest Construction Sdn Bhd (ECSB) and Knusford Bhd (KL:KNUSFOR).

Ekovest agrees to six-month extension for merger discussion between subsidiary and Knusford

US prices increased moderately in June as the declining cost of goods tempered a rise in the cost of services, underscoring an improving inflation environment that could position the Federal Reserve to begin cutting interest rates in September.

US inflation rises moderately, consumer spending cools

Here’s a quick look at some of the stories that made headlines today.

EVENING 5: Five things you need to know today

The prestigious five-star Lexis Hibiscus 2 luxury resort is currently under construction by the KL Metro Group and is expected to be completed by 2029, said Negeri Sembilan Menteri Besar Datuk Seri Aminuddin Harun.

Construction of RM1.6 bil GDV Lexis Hibiscus 2 resort will be completed in 2029

Practice Note 17 (PN17) company Alam Maritim Resources Bhd (KL:ALAM) has announced its regularisation plan, which includes a share capital reduction of RM440 million, 10-to-one share consolidation, an issuance of renounceable rights shares with warrants and a scheme of arrangement with its creditors.

Alam Maritim submits regularisation plan to exit PN17 status

Health and wellness direct selling company DXN Holdings Bhd (KL:DXN) said on Friday its net profit rose 10.26% in the first quarter from a year earlier due to higher revenue recognised from overall operating segments.&nbsp;

DXN Holdings 1Q net profit up 10.26%, targets market presence in Zambia, Ghana  

Wall Street bounced back on Friday as megacap tech and chip stocks recovered from the week's pummeling, while a largely in-line key inflation reading kept bets for an early start to interest-rate cuts alive.

Upholstery furniture products manufacturer Homeritz Corp Bhd’s (KL:HOMERIZ) net profit surged 46.37% in the third quarter from a year earlier, thanks to higher sales volume and stronger US dollar. &nbsp;

Net profit for three months ended May 31, 2024 (3QFY2024) climbed to RM9.09 million or earnings per share of 1.96 sen, from RM6.21 million or 1.34 sen per share recorded in 3QFY2023. &nbsp;

Homeritz’s 3Q net profit soars 46.37% on higher sales and strong greenback

Cyberview Sdn Bhd has signed three Memoranda of Understanding (MOUs) with three companies to make Cyberjaya a global technology hub.

Chief executive officer Kamarul Ariffin Abdul Samad said the companies involved were Permodalan Negeri Selangor Bhd (PNSB), Selangor Information Technology &amp; Digital Economy Corporation (SIDEC) and digital infrastructure company Equinix Malaysia.

Cyberview signs three MOUs to make Cyberjaya a global technology hub

The developer of a supertall condo tower in Miami’s Brickell neighbourhood has hired a new sales team after ousting an embattled real estate brokerage from the project.

One Sotheby’s International Realty has taken over marketing at 888 Brickell Dolce &amp; Gabbana Miami, JDS Development’s pre-construction building overlooking Biscayne Bay in the city’s financial centre.&nbsp;

KUCHING (July 26): Türkiye is committed to expanding&nbsp;its bilateral partnership with Malaysia and&nbsp;seeking to explore collaborations in high-tech and green energy industries in Sarawak, said Turkish Ambassador to&nbsp;Malaysia Emir&nbsp;Salim Yuksel.&nbsp;

Türkiye seeks collab with Sarawak on high-tech, green energy — Turkish Ambassador

Biopharmaceutical company Malaysian Genomics Resource Centre Bhd (KL:MGRC) has proposed to undertake a private placement that is expected to raise up to RM4.98 million.

MGRC plans private placement to raise up to RM4.98 mil

SARAWAK expects to formalise a deal to raise its stake in Affin Bank Bhd to about 30% in about a month, according to the state’s premier Tan Sri Abang Johari Openg.

In an exclusive interview with The Edge in Kuala Lumpur last Friday (July 19), Abang Johari said the state is committed to...

Deputy Prime Minister Datuk Seri Fadillah Yusof paid a courtesy visit to Vietnamese Prime Minister Pham Minh Chinh on Friday.

"During the meeting with His Excellency, I reaffirmed the commitment of the prime minister and the Malaysian government to continue strengthening cooperation between Malaysia and Vietnam," he said in a post on the social media platform X.

Kumpulan Kitacon Bhd (KL:KITACON) has secured a RM54.5 million contract to undertake the construction of 186 terrace houses in Rawang, Selangor.

Kumpulan Kitacon bags RM54.5m job to build houses in Rawang

Treasuries are rising at the end of a volatile week as the Federal Reserve’s favourite inflation gauge cemented traders’ expectations for an interest-rate cut in September.

The advance pushed yields lower across the curve on Friday, with two- and 10-year yields down by about five basis points (bps) to 4.38% and 4.2%, respectively.

Penang Port Sdn Bhd (Penang Port) on Friday announced the acquisition of five Kalmar container handling machines to optimise operations and improve service levels.

Penang Port acquires Kalmar container handling equipment to enhance services

US authorities filed criminal and civil charges against prominent activist short seller Andrew Left for an alleged long-running market manipulation scheme involving bets on stocks including Nvidia and Tesla, they said on Friday.

Hungary will face fuel shortages from September if full Russian oil flows are not restored, a government official said on Friday, accusing Ukraine of blackmailing it by partially suspending supplies.

Eastern European Union (EU) members Slovakia and Hungary have been hit by a stop in flows from Russian group Lukoil coming via Ukraine after sanctions were imposed on the company.

Economic Report 2019/2020

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