Malaysia to be among the World Leaders in Infrastructure Spending out to 2021

26 May 2017

Growth in infrastructure spending in Malaysia is expected to be among the fastest in the world going forward, averaging 15.5% in nominal terms out to 2021 according to a new report from Timetric’s Infrastructure Intelligence Center (IIC),

 

Malaysia’s 11th five-year plan (2016–2020) has set a goal for the end of the decade of achieving advanced economy status, defined as having a gross national income (GNI) per capita of US$12,475 (as of 2015). Malaysia’s GNI reached US$10,570 in 2015 – up from US$8,230 in 2010 – so this is not out of reach. The achievement of an advanced economy GNI by 2020 will be dependent on the continued expansion of the economy, including in infrastructure where investment will seek to not only expand capacity, but also to improve performance, productivity and affordability. 

 

Malaysia’s construction industry is currently growing at a rapid pace, with output reaching a total value of US$31.0 billion in 2016. In real terms, this corresponded to a 5.1% expansion for the industry. Infrastructure construction has been the major driver behind the construction sector growth, representing US$10.6 billion, or 34% of the total construction output. Output is projected to grow substantially to US$21.8 billion by 2021 (in nominal value terms) according to the IIC.

 

The IIC is currently tracking 86 large-scale infrastructure construction projects in Malaysia, at all stages of development from announcement to execution. These projects have a total investment value of US$124 billion. The railways sector accounts for the largest share of the project pipeline, with a total project value of US$53 billion. 

 

Malaysia has a very well-developed physical infrastructure compared to both the wider Asian region and more globally. According to the World Economic Forum’s Global Competitiveness Report, Malaysia scored 5.6 for the overall quality of its infrastructure (within a range of 1 to 7) putting it in 15th place globally. Malaysia should look towards the most advanced Asian economies, Hong Kong (3rd), Singapore (4th) and Japan (7th) as future investment models.

 

The 2017 budget for Malaysia includes a significant portion of funding for the various infrastructure sectors. Amongst a number of initiatives, US$244 million has been outlined for widening and improving broadband coverage, with US$1.4 billion and US$605 million set aside for the transportation and logistics and utilities sectors respectively. 
 



Source: Company Press Release