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?

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

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

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?

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

Malaysia's real gross domestic product (GDP) is expected to grow by 4.8% in 2020, which is slightly stronger than the pace of 4.7% in 2019.

The stronger growth is underpinned by resilient domestic demand, particularly household spending, thanks to stable labour market and low inflation.

Malaysian economy to grow 4.8% in 2020 vs 4.7% in 2019

Few may know that the motor vehicles, trailers and semi-trailers sector is a major contributor to the government's tax revenue.

The sector generated RM13.16 billion tax revenue in 2015, which was 24.9% of the government's total tax collection of RM52.9 billion from commodity.

Motor vehicles the biggest taxpayers, followed by tobacco products

NEW YORK (Oct 8): The US said in a court filing on Tuesday that it was considering asking a judge to force Alphabet’s Google to divest parts of its business that helped the Big Tech firm maintain an illegal monopoly in online search.

US mulls potential breakup in Google search case

Boeing Co managed to hand over 33 aircraft to customers in September, when a strike shut down large parts of its manufacturing, while warning that the work stoppage at its main production hub in the Seattle area will reduce future deliveries.

Boeing cautions on deliveries as strike curbs aircraft output

BENGALURU (Oct 9): Copper prices in Shanghai dropped for a second straight session on Wednesday, pressured by doubts over economic recovery in top metals consumer China.

Shanghai copper dips for second session as China’s stimulus plan disappoints

Honda Motor Co said it is open to altering its electrification road map if demand for pure battery cars continues to wane, a sign the Japanese automaker may ultimately join international peers in walking back electric vehicle (EV) targets.

Honda leaves door open to revise EV strategy

Meta Platforms Inc is rolling out new artificial intelligence (AI) tools to help advertisers create and edit videos more easily, seeking to reach Facebook and Instagram users who are spending more time watching videos.

Meta launches generative AI video tools for advertisers

KUALA LUMPUR (Oct 9): Malaysian exporters are now keener to convert foreign proceeds amid sustained recovery of the ringgit, said members of Bank Negara Malaysia’s (BNM) Financial Markets Committee.

Malaysian exporters now keener to bring home foreign proceeds, BNM committee observes

KUALA LUMPUR (Oct 9): Press Metal Aluminium Holdings Bhd (KL:PMETAL) Southeast Asia’s largest aluminium smelter by capacity is expected to post double-digit earnings growth in FY2025 stable aluminium prices, as global monetary policies ease and China’s economy recovers, said Hong Leong Investment Bank (HLIB).

Press Metal to see double-digit earnings growth in FY2025 — HLIB

US Federal Reserve (Fed) vice-chair Philip Jefferson said risks to the central bank’s employment and inflation goals are now closer to equal.

“The balance of risks to our two mandates has changed — as risks to inflation have diminished and risks to employment have risen, these risks have been brought roughly into balance,” Jefferson said on Tuesday in prepared remarks for an event at the Davidson College in North Carolina.

Fed vice-chair says risks to inflation, employment now balanced

Citigroup Inc said US banks will be forced into a “dramatic shift” in how electronic payments are processed if New York state wins a lawsuit claiming the company doesn’t do enough to prevent online fraud.

'We are not bad guys': Citi pushes back on New York online fraud suit

Shares of Crest Group Bhd (KL:CREST) rose 13% on their trading debut on Wednesday, after the imaging company raised RM82.11 million from its initial public offering (IPO) on the ACE Market.

Crest Group rises 13% on ACE Market debut after RM82 mil IPO

A brief recap of some business news and corporate announcements that made headlines on Tuesday.

Public Bank, LPI Capital, Ireka, Perdana Petroleum, MClean, Enest, Sunsuria, Media Prima, Seal and Sime Darby

Shares of Crest Group Bhd (KL:CREST) rose 13% on their trading debut on Wednesday,&nbsp;after the imaging company raised RM82.11 million from its initial public offering (IPO) on the ACE Market.

The world’s largest technology companies drove stocks higher, with the market rebounding from its worst session in a month. A rout in Treasuries eased as bets on US Federal Reserve (Fed) rate cuts stabilised. Oil sank.

‘Mag Seven’ rally as Nvidia’s winning run hits 14%

Ever since President Xi Jinping sought to&nbsp;draw a line&nbsp;under China’s slowdown last month, investors have clamored for him to back up monetary easing with a powerful fiscal stimulus to help fuel one of the nation’s biggest stock rallies in years.

China markets warn Xi that more stimulus is needed

Equities in Asia were primed for early gains on Wednesday after a tech rally lifted Wall Street and bets on US Federal Reserve (Fed) rate cuts stabilised.&nbsp;

Stock futures for Japan, Australia and Hong Kong all advanced. An index of US-listed Chinese shares fell 6.9% overnight as concerns mounted that the latest burst of stimulus may&nbsp;be insufficient&nbsp;to convince investors of a sustainable rally in the country’s equity market. After surging almost 11% at the open on Tuesday following a week-long holiday, Chinese stocks lost nearly half their gains.

Asian stocks set to rise after tech lifts Wall Street

Shares of Ireka Corp Bhd (KL:IREKA) surged to their highest in more than two years on Wednesday, after the construction company announced a RM1.07 billion contract.

Ireka Corp shares surge to over two-year high after RM1b contract win

Lee Wei Ling, the daughter of Singapore’s first prime minister Lee Kuan Yew, passed away at the age of 69.

Wei Ling died at home on Wednesday, according to a Facebook&nbsp;post&nbsp;by her brother Lee Hsien Yang. She was also the sister of former Singapore prime minister Lee Hsien Loong.

Wei Ling, daughter of Singapore's Lee Kuan Yew, dies at 69

A new HBO documentary about the origins of bitcoin suggests that Satoshi Nakamoto, the pseudonymous creator of the original cryptocurrency, is likely Canadian software developer Peter Todd.&nbsp;

HBO documentary suggests bitcoin creator 'Satoshi Nakamoto' is developer Peter Todd

Shares of Pertama Digital Bhd (KL:PERTAMA) resumed their decline in early trade on Wednesday, to their lowest&nbsp;in more than four years.

Pertama Digital fell as much as 20 sen or 41.2% to 28.5 sen, after hitting a limit down the day prior.

Pertama Digital resumes decline in early trade after limit down day prior

In a matter of weeks, Budget 2025 will be upon us. Research houses have started rolling out their predictions, anticipating areas of focus that the government will zero in to continue to support and bolster the economy.

A look at the previous four national Budgets

Asean micro, small and medium enterprises (MSMEs) should benefit from the US$2 trillion (RM8.55 trillion) expected economic value generated from the Digital Economy Framework Agreement (DEFA) by 2030.

Asean MSMEs should benefit from Digital Economy Framework Agreement, says Zafrul

The US Federal Aviation Administration (FAA) warned operators of certain Boeing Co 737 aircraft that the rudder system could possibly jam due to a faulty part, a week after a safety official rebuked the agency for not acting sooner to address the issue.

FAA issues safety alert on Boeing 737 rudder issue after NTSB rebuke

KUALA LUMPUR (Oct 9): Malaysian exporters are now keener to convert foreign proceeds amid sustained recovery of the ringgit, said members of Bank Negara Malaysia’s (BNM) Financial Markets Committee.

Citigroup Inc&nbsp;said US banks will be forced into a “dramatic shift” in how electronic payments are processed if New York state wins a lawsuit claiming the company doesn’t do enough to prevent online fraud.

Minister in the Prime Minister's Department (Federal Territories) Dr Zaliha Mustafa said she held discussions with the mayor of Hangzhou (China) Yao Gaoyuan on Tuesday to strengthen "twin cities" cooperation between Kuala Lumpur and Hangzhou.

Zaliha in talks with mayor for KL-Hangzhou smart co-operation as twin cities

KUALA LUMPUR (Oct 9): Press Metal Aluminium Holdings Bhd (KL:PMETAL) Southeast Asia’s largest aluminium smelter by capacity is expected to post double-digit earnings growth in FY2025 stable aluminium prices, as global monetary policies ease and China’s economy recovers, said Hong Leong Investment Bank (HLIB).

Prime Minister Datuk Seri Anwar Ibrahim has arrived in the Laotian capital here to attend the 44th and 45th Asean Summits and Related Summits.

His aircraft landed at Wattay International Airport at 8.37pm local time (9.37pm Malaysian time).

Anwar arrives in Vientiane for Asean Summits and Related Summits

Efforts to strengthen national unity require the synergy of various parties including the people by participating in various programmes implemented by the government through the Ministry of National Unity.

Build unity through stronger synergy between govt and people

The Enforcement Agency Integrity Commission (EAIC) has seized 156 Social Visit Pass (Medical Treatment Pass category) application files believed to be linked to a medical visa syndicate involving Immigration Department officers.

EAIC seizes 156 files in probe on medical visa syndicate involving immigration officers

Alimentation Couche-Tard Inc&nbsp;sent Seven &amp; i Holdings Co&nbsp;a new potential acquisition price of ¥7 trillion (US$47.20 billion or RM202.23 billion), people with knowledge of the matter said, showing that the Canadian company is still seeking to enter takeover talks after its initial bid was rejected.

Economic Report 2019/2020

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