ECRL to boost economic growth by 4.6 per cent
KOTA KINABALU: The East Coast Railway Link (ECRL) has been projected by the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) to boost economic growth by 4.6 per cent.
MIDF Research highlighted that according to the project owner Malaysia Rail Link Sdn Bhd (MRL), ECRL is expected to create RM50.1 billion of gross domestic product (GDP) impacts.
“Based on our estimate, we forecast the project to contribute 4.6 per cent to the domestic growth.
“The boost for the growth is expected to kick-in from the project inception until completion,” the research arm said.
MIDF Research has however noted that the full estimated GDP contribution will depend on the pace of spillover effects towards other economic sectors.
The research arm further noted that compensation of employees and net operating surplus are projected to rise by 3.8 per cent.
As the project requires machinery and transport equipment, MIDF Research’s estimate showed imported commodities and consumption of fixed capital is to increase by 4.6 per cent and 9.9 per cent respectively.
“Moving forward, the railway project would affect economic expansion by direct and indirect effects in the long run, partly by jobs creation, opening-up new areas, foreign direct investment, increase external trade activities and strengthening domestic demand.”
Meanwhile, MIDF Research also noted that the RM55 billion railway project is expected to contribute to circa 5.3 per cent expansion in the real estate sector.
“This can be explained with the ECRL in place, we can anticipate an increase in new township areas and better towndevelopment in existing areas along the railway.
“The transportation ratio is 30 per cent passengers and 70 per cent freight,” it said.