Economic Report 2013/2014: Services sector expected to expand 5.5%,

by **Cals** Sat 26 Oct 2013, 21:08

Published: Saturday October 26, 2013 MYT 12:00:00 AM
Updated: Saturday October 26, 2013 MYT 9:27:30 AM
Economic Report 2013/2014: Services sector expected to expand 5.5%,

THE services sector is envisaged to grow 5.5%, accounting for 55% of gross domestic product (GDP). The intermediate services group is anticipated to grow 5.3% supported by the communication as well as real estate and business services subsectors.
The final services group is expected to increase 5.8% led by the wholesale and retail trade as well as accommodation and restaurant subsectors.
For the first six months of the year, the sector expanded 5.4% compared with 6.2% in the previous corresponding period, mainly driven by resilient domestic consumption and investment.
Wholesale and retail trade grew 5.4% in the first half of 2013 due to strong household spending. Growth is anticipated to be buoyed by higher private consumption amid stable employment conditions and income levels, coupled with the Government cash assistance.
The tourism industry is expected to gain from higher arrivals, which grew 7.9% to 12.6 million in the first six months of 2013.
This year, tourist arrivals are projected to reach 26.8 billion and spending is seen at RM65bil, benefiting from promotional campaigns ahead of Visit Malaysia Year 2014.
In the first half of 2013, the finance and insurance subsector grew at a moderate pace of 2.9% on lower net interest income due to slower financing activities.
The real estate and business services subsector grew 6.6% during the first six months of 2013 mainly driven by increased professional services in engineering for the oil and gas and construction industries. In 2013, the subsector is projected to increase 6.8%.
The other services subsector grew 5.2% in the first six months of 2013, with the value-added private education and health activities increasing 6.1% and 5.4%, respectively.