KUALA LUMPUR: Domestic demand is estimated to expand by 6.3 per cent for the whole year with private sector expenditure envisaged to increase by 6.7 per cent.
The role of private sector as the key engine of growth is reflected by its high contribution of 5.1 percentage points to gross domestic product (GDP) growth.
Meanwhile, the public sector expenditure is anticipated to Increase by 5 per cent, contributing 0.9 percentage point to GDP growth.
Private consumption, which recorded a growth of 5.3 per cent in the first half of 2024, is expected to increase by 5.5 per cent for the whole year on higher disposable income arising from favourable domestic economic activities and continued improvements in labour market conditions.
Meanwhile, private investment growth, which surged to 10.6 per cent in the first half of the year, is projected to sustain the double-digit momentum to grow by 11.1 per cent in 2024, mainly driven by firms' higher capital outlays in structure as well as machinery and equipment.
This is in line with increasing domestic and external demand as well as the continuous adoption of automation and digitalisation amid the global technology upcycle.
Public consumption expanded by 5.5 per cent in the first half of 2024 and is estimated to register 3.5 per cent for the entire year.
In the second half of the year, the growth is expected to moderate following the high base effect in the second half of 2023.
However, the moderate growth is offset by the higher spending on emoluments, which includes the salary increment for civil servants under the Public Service Remuneration System (SSPA), as well as supplies and services.
Meanwhile, public investment demonstrated a strong performance, recording a double-digit growth of 10.3 per cent in the first half of 2024, mainly driven by higher capital outlays from non- financial public corporations (NFPCs).
For the full year, public investment is forecast to expand by 9.3 per cent, underpinned by higher capital spending from both the Federal Government development expenditure (DE) and NFPCS, particularly in ongoing key infrastructure projects such as flood mitigation projects, ECRL, Pan Borneo Highway Sabah, Light Rail Transit 3 (LRT3) and RTS Link.
Likewise, NFPCs are expected to continue their capital spending in the oil and gas as well as utilities industries.