By Adrian Lim
KUCHING, Nov 9: Sarawak’s economy is projected to register strong growth of six to eight per cent in 2021 after contracting between 3.5 per cent to 5 per cent this year.
Chief Minister Datuk Patinggi Abang Johari Tun Openg expressed belief that the state’s economy will recover from the Covid-19 pandemic driven by both internal and external demand.
“The state’s economy is projected to gradually recover once the Covid-19 pandemic situation improves, driving both domestic and external demand.
“With the easing of the Covid-19 lockdowns, the palm oil industry is gradually recovering, entering the second half of 2020, supported by improvement in global consumption.
“The 100 per cent exemption from export duty on crude palm oil, crude palm kernel oil and processed palm kernel oil starting July 1, 2020 to December 31, 2020 under the National Economic Recovery Plan (Penjana) initiative further adds to the increasing demand, notably from China and India,” he said at the Sarawak Legislative Assembly (DUN) chambers prior to the tabling of the State Budget 2021 today.
In the meantime, he said the state’s economy is projected to contract by 3.5 per cent to 5 per cent this year.
He explained that the lacklustre economic performance anticipated for 2020 is due to negative growth across all economic sectors arising from lower demand and the impact of the Movement Control Order (MCO) of the Covid-19 pandemic.
“Negative growth is expected across all sectors of the economy in Sarawak with tourism and manufacturing sectors the worst hit.
“The decline in the tourism sector has a spillover effect on other services such as transport, logistics, hotels, wholesale and retail trade as well as food and beverages industries.
“In the first nine months of the year, visitors’ arrival to Sarawak contracted by 64.1 per cent due to travel restrictions and closure of international borders,” he added.
Abang Johari disclosed that the services sector is expected to register negative growth of 1.4 per cent this year while the tourism sector will take some time to fully recover.
The manufacturing sector is projected to contract by 6.9 per cent in 2020 as production activities were disrupted across the global supply chain and companies were constrained to operate at limited capacity in the first three months of the Movement Control Order (MCO) period.
Abang Johari revealed the mining sector is projected to contract to 2.9 per cent in 2020 due to lower production of crude oil and natural gas.
He added the sharp decline in the mining sector was due to MCO as well as ongoing maintenance work and disruptions involving the Sabah-Sarawak gas pipeline in the first half of 2020.
Meanwhile, the construction sector is forecasted to contract by 9.5 per cent this year due to less construction activities as a result of MCO, shortage of workers and construction materials supply disruptions.
Nonetheless, Abang Johari who is also Finance and Economic Planning Minister said the construction sector is projected to register stronger growth next year as economic activities resume after the MCO.
He added the agriculture sector is forecast to register negative growth of 1.5 per cent this year due to lower exports as a result of lockdowns imposed by countries around the world. — DayakDaily
