The country’s GDP growth for 2021 is forecast at between 6% and 7.5%, predicated upon remaining uncertainties
by NUR HAZIQAH A MALEK / pic by MUHD AMIN NAHARUL
THE economy is seeing some recoveries this year despite the increased in number of Covid-19 cases and a few other discouraging factors; with the increase in car sales.
Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed (picture) said the GDP growth forecast for the year of between 6% and 7.5% is predicated upon the premise of remaining uncertainties.
“If the Covid-19 situation stabilises to two or three digits in terms of daily cases, then the prospects of economic recovery would be higher.
“Of course, if the condition remains uncertain, the prospects of hitting 7.5% is lower and we will have to opt for the lower end of the forecast,” he said at the National Oil and Gas Services and Equipment (OGSE) Industry Blueprint 2021-2030 launch in Kuala Lumpur yesterday.
“We acknowledged that there are still uncertainties, with underemployment still high and becoming an issue, while unemployment is between 4.8% and 4.9%.
“There are some good numbers, however, and yesterday the Malaysian Automotive Association shared that there has been a big increase in car sales partly due to the tax exemption,” he said.
Although many Malaysians, especially those working in the small and medium enterprises (SMEs), are still facing difficulties, Mustapa said there are signs that the economy is coming back and he is confident that the GDP growth will be in the range of 6% to 7%.
“No change to forecast whatsoever,” he said.
Meanwhile, Mustapa expects the OGSE industry to contribute between RM40 billion and RM50 billion to the country’s GDP by 2030 from RM20 billion last year.
“The higher contribution by the sector will be driven by the implementation of the (newly launched) blueprint,” he said.
The blueprint will further intensify the industry’s development and adaptation to the rapidly evolving needs and requirements of the global market such as energy transition.
Prime Minister’s Department’s Economic Planning Unit (EPU) DG Datuk Saiful Anuar Lebai Hussen said with the blueprint, the OGSE industry will be better equipped to secure opportunities not only in adjacent industries but also in the global market.
“As a significant contributor to the country’s economy, the health of the OGSE industry will be key to achieving current and future national development agendas,” he said.
The OGSE sector is expected to remain as one of the most important contributors for the country’s economic development aspirations, as it has contributed around 5% to 8% to the country’s GDP.
It had a total annual revenue amounting to over RM65 billion in 2019, of which approximately 32% were derived from export. The industry currently has over 59,000 skilled and semi-skilled talents from 1,500 active companies.
Meanwhile, the EPU sectoral deputy DG Azhar Noraini said last year’s business environment was among the toughest for the sector due to the Covid-19 pandemic, which affected economic activities worldwide.
He said low oil prices due to severe decline in activities led to demand disruption, oversupply and oil storage shocks which resulted in many challenges for the sector.
“Oil and gas projects were either delayed or cancelled and revenue fell dramatically due to global supply chain disruption,” he said.
In conjunction with the launch, the Malaysia Petroleum Resources Corp (MPRC) also introduced the OGSE development grant.
MPRC president and CEO Mohd Yazid Ja’afar said the grant was developed with SMEs and mid-tier companies in mind.
“In line with the newly launched blueprint, it is hoped that the grant will help enhance local players’ competitiveness through innovation in technology, and help accelerate their move towards commercialisation and exports,” he said.
The organisation targets to support at least 20 local OGSE companies per year, and the grant is a targeted support for eligible companies in the sector, with a matching fund on a 70:30 basis.