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

Tenaga Nasional Bhd’s (TNB) (KL:TENAGA) customers who use up to 800 kilowatt-hours (kWh) of electricity per month will receive a pro-rata credit for the September bill adjustment, which will be credited directly to their October 2026 electricity bills.

Customers to get pro-rata credit in October 2026 bills, says TNB

(Oct 2): Data centre operator Firmus Grid Ltd has priced its initial public offering at A$11 a share, seeking to raise at least US$5 billion in its Australian initial public offering (IPO) this month, according to terms of the deal seen by Bloomberg, ahead of one of Australia’s largest-ever IPOs.

Nvidia-backed Firmus prices landmark IPO at A$11 a share

SYDNEY/BENGALURU (Oct 2): Australian lender ANZ Group said on Friday that it would become the latest blue-chip client to dump KPMG as its auditor following the firm's whistleblower and data leak scandal.

ANZ to replace scandal-hit KPMG as auditor after nearly six decades

The 30% slide in Indonesia’s benchmark stock index this year has prompted one overseas fund to invest in the country for the first time.

Indonesia’s 30% stock rout lures Swedish fund in first-ever bet

TOKYO (Oct 2): Annual core inflation in Japan's capital accelerated in September at its fastest pace in 10 months, highlighting mounting price pressure and bolstering the case for further interest rate hikes from the central bank.

Tokyo core inflation rate jumps in September, bolsters case for more BOJ hikes

KUALA LUMPUR (Oct 2): Gas Malaysia Bhd (KL:GASMSIA) aims to make a final investment decision on plans for its first regasification terminal by the second half of next year, with the facility due to come online by the end of 2030, its chief executive said.

Gas Malaysia targets investment decision on Kedah LNG terminal by second half of 2027

The government reintroduced the sales tax and service tax, collectively known as SST, on Sept 1, 2018. It replaced the goods and services tax (GST), which had been in place since April 2015. At the time, GST was seen as too broad-based and burdensome for ordinary Malaysians. Some businesses also ...

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The first apartment came up for auction and nobody moved.

Luxury condos seized in Singapore’s biggest money-laundering case find few buyers

Petroliam Nasional Bhd’s (PETRONAS) capital allocation could come under pressure if the government seeks larger dividend contributions from the state-owned oil firm to offset higher fuel subsidy costs, according to BIMB Securities.

Larger PETRONAS dividend may weigh on long-term capital allocation — BIMB Securities

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

MN Holdings, IOI Properties, Yinson, Tien Wah Press, KKB, Hengyuan, Hextar Capital, Globaltec 

Asian shares fell on Friday as investors grappled with wild swings in bond and currency markets ahead of key US jobs data, while a widening military buildup in the Gulf kept oil prices elevated.

Asian shares fall after wild swings in bonds, forex before US jobs data

PERTH (Oct 2): Oil prices drifted slightly higher on Friday after China halted fuel exports, while the Wall Street Journal reported that the US is sending more troops and carriers to the Middle East as it also tries to make Europe draw down more emergency diesel.

Oil rises slightly as market weighs mixed supply signals

KUALA LUMPUR (Oct 2): IOI Properties Group Bhd's (KL:IOIPG) second attempt at Shenton House is drawing less analyst concern now that the group has a clearer capital-recycling path through its Malaysian REIT and a potential Singapore REIT.

IOI Properties' second bid on Shenton House draws less caution as REITs open capital-recycling route — analysts

Here's a heads up on what to look out for today.

YOUR DAY AHEAD: Oct 2, 2026 

Malaysia’s top 100 technology start-ups identified by Cradle Fund Sdn Bhd collectively generated RM8.5 billion in revenue in the financial year 2024, with an average compound annual growth rate of 87% between 2021 and 2024.

Top 100 start-ups generate RM8.5 bil in revenue

Petroliam Nasional Bhd’s (PETRONAS) capital allocation could come under pressure if the government seeks larger dividend contributions from the state-owned oil firm to offset higher fuel subsidy costs, according to BIMB Securities.

PUTRAJAYA (Oct 1): University students and higher education institutions will be among the key priorities in Budget 2027, which is currently being finalised, said Prime Minister Datuk Seri Anwar Ibrahim.

Anwar: University students, institutions among Budget 2027 priorities

SYDNEY/BENGALURU (Oct 2): Australian lender ANZ Group said on Friday that it would become the latest blue-chip client to dump KPMG as its auditor following the firm's whistleblower and data leak scandal.

The first apartment came up for auction and nobody moved.

A rebound in Treasuries brought relief to Wall Street, spurring gains in stocks and overshadowing concerns about inflationary pressures stemming from elevated energy costs.

US stocks rise as yields drop from multi-decade highs

&nbsp;President Donald Trump’s top trade adviser said there’s no timeline for cutting tariffs on the US$60 billion of goods recently recommended by the US-China Board of Trade.

Greer says no date set for US-China board of trade tariff cuts

NEW YORK (Oct 1): Two of the Federal Reserve’s top policymakers this week staked out an unusually clear case for taking in more data before deciding about another interest-rate hike, driving investors to largely abandon bets on an interest rate increase at the central bank's next policy meeting, in late October.

Fed policymakers lean against October rate hike

TOKYO (Oct 2):&nbsp;Annual core inflation in Japan's capital accelerated in September at its fastest pace in 10 months, highlighting mounting price pressure and bolstering the case for further interest rate hikes from the central bank.

The government reintroduced the sales tax and service tax, collectively known as SST, on Sept 1, 2018. It replaced the goods and services tax (GST), which had been in place since April 2015. At the time, GST was seen as too broad-based and burdensome for ordinary Malaysians. Some businesses also ...

BENGALURU (Oct 1): OpenAI has informed more than 100 organisations about incidents involving unauthorised activity tied to its AI agents, according to a blog post by the ChatGPT maker, as AI labs face mounting scrutiny over rogue AI agent activity.

OpenAI alerts more than 100 groups about rogue AI agent activity

KUALA LUMPUR (Oct 2): Gas Malaysia Bhd (KL:GASMSIA)&nbsp;aims to make a final investment decision on plans for its first regasification terminal by the second half of next year, with the facility due to come online by the end of 2030, its chief executive said.

(Oct 2): The Saudi-led coalition fighting Yemen's Houthis said on Thursday that the Iran-aligned group had attacked a power distribution station in Medina which supplies electricity to the Prophet's Mosque, one of Islam's holiest sites.

Saudi-led coalition says Houthis attacked power station for Prophet's Mosque in Medina

LONDON/NEW YORK (Oct 1): Global M&amp;A activity in the third quarter totalled US$993 billion, down 41% compared to the prior quarter, marking the first quarter to fall below US$1 trillion since the second quarter of 2025, according to LSEG data.

Global M&A deal rush fades in third quarter as rising borrowing costs bite

US alleges California man smuggled export-controlled servers to China

Economic Report 2019/2020

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