By Sharen Kaur - February 20, 2024
KUALA LUMPUR: Sarawak's ambition to achieve developed state by 2030 will be powered by a capital injection of over RM100 billion into its economy over the next six years.
This planned influx of capital aligns well with the state's PCDS 2030, emphasising infrastructure, utilities, transport, manufacturing, and renewable energy as pivotal facilitators, among other sectors.
The state government's initiatives suggest a plethora of infrastructure opportunities, not only related to hydrogen and methanol but also encompassing broader infrastructure projects.
"This could bode well for Sarawak's economy moving forward, which grew 6.5 per cent year-on-year (YoY) in 2021 after recording a 3.1 per cent YoY expansion in the preceding year, according to RHB Research.
Looking ahead, Sarawak is poised for economic growth between 5.0 per cent and 6.0 per cent in 2024, surpassing an estimated 4-5 per cent in 2023, the firm noted.
RHB highlighted that this economic growth would be bolstered by increased development expenditure (DE), both from the Sarawak and federal governments.
Notably, Sarawak's allocation of DE stands at RM7.8 billion, the highest in five years, while the federal government's allocation to Sarawak reaches a historic high of RM5.8 billion in 2024.
The heightened DE is anticipated to fuel growth in Sarawak's construction sector gross domestic product (GDP), particularly through a surge in infrastructure projects.
In 2023, Sarawak ranked fifth in terms of project value awarded at RM9.9 billion, after Selangor (RM25.4 billion), Johor (RM20.5 billion), Kuala Lumpur (RM15.5 billion), and Pulau Pinang (RM12.7 billion).
Projects such as the STR and Phase 2 of the Sabah-Sarawak Link Road, alongside various other construction endeavors, are expected to elevate Sarawak's project value awards in the coming years.
Sarawak's construction sector witnessed commendable growth, recording RM14.6 billion worth of construction work in 2023, with a compounded annual growth rate of 4.5 per cent over six years—a notable feat compared to states experiencing declines.
RHB highlighted Sarawak's aggressive infrastructure development, supported by increased DE at both federal and state levels.
It said that this aligns with the state's PCDS 2030, aiming for a GDP of RM282 billion by 2030, as opposed to the estimated RM146 billion for 2023.
The firm identified key sectors such as water, transportation, renewable energy, and industrial gas production as prime areas for infrastructure expansion, along with the potential establishment of data centers.
Additionally, new oil discoveries and Sarawak's advantageous position for carbon capture and storage are anticipated to drive demand for related infrastructure.
Source: https://www.nst.com.my/property/2024/02/1015358/sarawaks-growth-will-be-backed-increased-de-allocation-says-rhb-research
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