Services sector expected to post higher growth of 5.6pc
THE services sector is expected to record a higher growth of 5.6 per cent this year as it remains one of the main contributors to the country’s gross domestic product (GDP).
The sector’s growth is expected to be driven by strong consumptionrelated sub-sectors such as wholesale and retail trade, information and communication, food and beverage (F&B) as well as accommodation.
Next year, the sector is expected to grow higher at 5.7 per cent.
In the first six months of this year, the services industry expanded 5.4 per cent, mainly driven by resilient domestic economic activities.
Its growth this year will be led by wholesale and retail trade as well as F&B and accommodation sub-sectors.
The wholesale and retail trade sub-sector rose 5.9 per cent during the first half of this year following continued household spending.
The retail segment increased 6.3 per cent from January to June with sales at specialised stores expanding 8.4 per cent to RM129.6 billion, compared with RM119.6 billion in the same period last year.
This was driven by the sales of household products as well as information and communication equipment.
The strong growth in the retail segment was also driven by campaigns such as the “Buy Malaysia Campaign”, price reduction campaign and “Kempen Jom Beli Barang Raya@Putrajaya”.
The motor vehicle segment declined three per cent in the first six months of this year from 4.7 per cent in the same period last year due to advance purchases made during the fourth quarter of last year in anticipation of higher car prices this year.
The F&B segment rose 7.4 per cent following increased spending on restaurant dining, particularly during festivities.
The accommodation segment also increased 3.6 per cent, mainly supported by tourism-related activities.
In the first six months of this year, tourist arrivals rebounded 3.7 per cent to 13 million, with arrivals from China and Thailand improving significantly by 32.1 per cent, followed by Brunei (15.2 per cent) and South Korea at 11.2 per cent.
The government has introduced various programmes to boost the tourism industry. They included relaxing visa requirements, allowing extension of stay for tourists from selected countries as well as implementing electronic visa for tourists from China in March and India in mid-April.
The real estate and business services sub-sector grew 6.6 per cent from January to June, driven by business services activities which saw a higher demand for professional services.
However the real estate segment grew at a slower pace of 4.5 per cent mainly due to lower residential and commercial property transactions.