12 January 2010

The services sector must grow by at least 6-7 per cent if Malaysia wants to achieve a Gross Domestic Product (GDP) growth of between 4-5 per cent in 2010, International Trade and Industry Minister, Datuk Seri Mustapa Mohamed said.

"The services sector has to grow a lot faster than the GDP," he said, adding that the sector has increasingly been a significant contributor to the economy.

In 2008, the sector contributed 55 per cent to GDP and despite the global economic slowdown, it remained strong and resilient.

"The services sector is the main focus of our efforts going forward as it offers high quality jobs and wages," said Mustapa.

Hence, the government may revise the roadmap for the services sector in the Third Industrial Masterplan according to the needs of the New Economic Model, he told reporters after opening the Malaysian International Chamber of Commerce and Industry Services Summit here Tuesday.

For the first three quarters of 2009, services was the only economic sector that registered growth and increased its contribution to the GDP.

The services sector, which grew by 3.2 per cent in the third quarter of 2009, was expected to perform well even in the fourth quarter of the year.

"We can also expect to see a third year of continous surplus in trade in services in 2009," he said.

As an indication, Malaysia's services trade amounted to RM92 billion in the first-half of 2009. Exports amounted to RM47.9 billion while imports were valued at RM44.1 billion, registering a RM3.8 billion surplus for the period.

The services sector also attracted high levels of investments over the years with approved investment of RM23 billion registered in the first six months of 2009.

"It is significant that most of the investments in this sector originated from domestic sources. In fact, domestic investment in the services sector ranged from 85-90 per cent in the last five years," said Mustapa.

However, he said more foreign participation could bring about the transfer of technologies and expertise, create new capabilities and help fill the vacuum in services not available in the country.

-- BERNAMA