KUALA LUMPUR – MIDF Research expects Sabah’s economic growth to be on an upbeat momentum for 2022 and 2023, mainly supported by the primary sectors.
The research firm said in a note that it foresees the performance of the state’s primary sectors, namely agriculture and mining, to improve steadily, buoyed by the economic reopening and elevated commodity prices.
“We foresee bright prospects for the Sabah economy, particularly driven by elevated global commodity prices, the revival of tourism-related activities, and an increase in infrastructure spending,” it said.
It forecasts Brent crude oil price to average at US$105 (RM497) per barrel for 2022 and US$96 per barrel for 2023, while crude palm oil is projected to average at RM5,000 per tonne for 2022 and RM3,500 for 2023.
MIDF Research said Sabah has the largest agriculture employment in the country, with more than one-third of national farmers being in Sabah, while mining workers in the state accounted for 11.2% of national mining employment as vast oil reserves are located in Sabah.
“In the long run, we opine the job market to shift slightly towards manufacturing employment amid the free trade zone establishment, creation of more downstream activities, and increased foreign investments in Sabah,” it said.
Moving into 2023, MIDF Research believes in better employment growth in the construction sector particularly with the Pan Borneo Highway and other road network expansion projects.
As of September 2022, Pan-Borneo Sabah Highway was at 65% completion and the research firm believes the other 35% of the work will be rolled out in 2023 onwards.
In addition, the expansion of Kalimantan, Indonesia will benefit the Sabah economy, it said.
“The proposed road construction to connect the Kalabakan and Serudong areas with Simanggaris, Indonesia, which would be at the initial stages will enhance greater connectivity between Sabah and Kalimantan.
“Growth in Sabah’s construction sector will also be supported by the implementation of other infrastructure projects such as the Sabah-Sarawak Link Road Phase Two project, which will commence next year, and the resumption of the Cinta Mata dam construction in Tawau,” it said.
On the other hand, the international borders reopening since April 22 will revive Sabah’s tourism activities and overall services sector, said MIDF Research.
As of July 2022, Sabah received more than 850,000 tourists, among which at least 90% are domestic visitors.
Hence, tourism-related jobs are expected to increase steadily, thanks to borders reopening and the strong domestic economic recovery.
Overall, Sabah’s economy is projected to grow by 4.1% per annum from 2021 to 2030, slightly higher than the pre-pandemic average of 3.8% (2016 to 2019). – Bernama, October 21, 2022
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