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

Chicago Board of Trade corn futures turned lower on profit-taking after the benchmark contract hit a six-month high in choppy trade ahead of the year's end, market analysts said.

Corn futures fall on profit-taking after reaching six-month high

The US Treasury Department was hacked by a Chinese state-sponsored actor through a third-party software service provider, according to a letter the agency sent to Congress on Monday.

US Treasury Dept says it was breached by Chinese-backed hacker in 'major cybersecurity incident'

Asian shares are poised to open lower, after stocks extended losses for a third day on Wall Street due to weakness in the tech sector.

Asian stocks eye weak open on Wall Street losses

A banner year for US stocks is ending poorly as a retreat in technology stocks extended a stretch of losses that began when the Federal Reserve cooled expectations for interest-rate cuts two weeks ago.

US stocks drop for a third day; Treasuries rally

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

Gamuda, MUI Properties, Chin Teck Plantations, Gadang, Apex Equity, Samaiden, Yinson, Well Chip, Sunway, EA Technique

US stock markets will close Jan 9, in observance of a national day of mourning for former President Jimmy Carter.

The New York Stock Exchange, Nasdaq Inc’s US equities exchanges and Cboe Global Markets Inc will shut, the companies said. CME Group Inc, operator of US-based equity and interest-rates markets, had not yet commented on its plans.

US stock market to close Jan 9 on Carter’s day of mourning

Ukraine and Russia carried out a new exchange of prisoners of war on Monday, with Kyiv bringing home 189 former captives, President Volodymyr Zelenskiy said on Monday.

Zelenskiy thanked the United Arab Emirates and other partners for facilitating the swap.

Ukraine says it brings home 189 POWs in swap with Russia

Wall Street's main stock indexes opened sharply lower on Monday and hit their lowest in over a week, as sparse trading volumes and the specter of elevated treasury yields cast a cloud over the traditionally strong year-end rally for equities.

Wall Street hits one-week low in thin trading, elevated yields add pressure

Sunway Bhd (KL:SUNWAY) has appointed its independent director Datuk Mohd Anuar Taib to an executive role as deputy president effective Jan 2, 2025.

Anuar, who will step down as chief executive officer of Sapura Energy Bhd (KL:SAPNRG) on Tuesday (Dec 31), joined the board of Sunway in July 2023 as an independent non-executive director.

Sunway appoints outgoing Sapura Energy CEO Anuar Taib as deputy president

A federal appeals court on Monday upheld a US$5 million (RM22.3 million) verdict that E Jean Carroll won against Donald Trump when a jury found the US president-elect liable for sexually abusing and later defaming the former magazine columnist.

Trump loses appeal of E Jean Carroll US$5m defamation verdict

A banner year for US stocks is ending poorly as a retreat in technology stocks extended a stretch of losses that began when the Federal Reserve cooled expectations for interest-rate cuts two weeks ago.

The US Treasury Department was hacked by a Chinese state-sponsored actor through a third-party software service provider, according to a letter the agency sent to Congress on Monday.

Asian shares are poised to open lower, after stocks extended losses for a third day on Wall Street due to weakness in the tech sector.&nbsp;

Chicago Board of Trade corn futures turned lower on profit-taking after the benchmark contract hit a six-month high in choppy trade ahead of the year's end, market analysts said.

Economic Report 2019/2020

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