PUTRAJAYA, March 9 (Bernama) — Gains received from the Economic Transformation Programme (ETP) in domestic demand and investments would be the major driving force in avoiding a further downturn in the domestic market.
“The ETP ensures a robust economic growth for Malaysia,” said economist Manokaran Mottain of AmResearch Sdn Bhd to Bernama when asked to comment on the additional new projects announced by the government on Tuesday.
Manokaran said the Entry Point Projects (EPPs) under the ETP announced so far would have a strong positive impact on the economy over the medium term.
AmResearch’s gross domestic product growth forecast is 5.5 per cent this year.
During the fourth ETP progress update yesterday, Prime Minister Datuk Seri Najib Tun Razak announced an additional nine new projects while recapping 14 others from eight out of the 12 National Key Economic Areas (NKEAs).
Combined, these 23 projects would produce RM14.75 billion in investments, RM20.1 billion in gross national income and 88,354 in incremental jobs.
Among the nine newly announced EPPs, three were announced for Oil, Gas & Energy NKEA, two for Agriculture NKEA, and one each for Tourism, Healthcare, Palm Oil and Electrical & Electronic NKEAs.
“Overall, we are encouraged by the consistent announcement of details on ETP, detailing the road map towards achieving the high-income nation status by 2020,” Manokaran said.
He said speedier announcement of ETP projects and continuous news flow on ETP would certainly be positive for the overall economy as well as the financial market.
He said there were good reasons to be optimistic about the ETP, more than previous plans where a knee jerk reaction of skepticism had been seen with every new plan.
“Providing a strong focus on a few key growth engines, coupled with a detailed approach and a course of action, the ETP is expected to be more successful than previous economic strategies,” he said.
Manokaran noted that in the absence of a prolonged crisis, there would undoubtedly be some highly bankable projects.
“One of the biggest winners is certainly the banking system as most of the necessary funding and financing would be obtained from these institutions,” he said.
The economist said the implementation of these EPP projects were also expected to encourage growth across all sectors in the economy.
“The construction sector would also be one of the biggest beneficiaries of the ETP as infrastructure development plays a major role in ensuring the goals of these 12 NKEAs are met,” he said.
In that respect, manufacturing would also grow from strength to strength as these sectors were heavily correlated, he added.
“As activities in these sectors increase, higher income levels would be achieved in line with improvements in employment, further pushing domestic demand,” he said.
The local research house is also positive that the government’s proactive and bold steps towards transformation would certainly help Malaysia to achieve an average six per cent growth.
The government has set that percentage growth under the 10th Malaysia Plan via increased private investment averaging RM115 billion over the period.
AmResearch believes the government has been continuously addressing the constraints that are hindering investment in the country.
“This includes addressing loss of competitiveness, complex licensing regulations, delays at one-stop approval and high cost of doing business,” Manokaran said.
The government, he said, was consistently improving supporting infrastructures such as high-speed broadband services and shortage of skilled manpower both in the technical and professional spheres.
Source : Bernama