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KUALA LUMPUR: Malaysia’s 2023 nominal gross domestic product (GDP) amounted to RM1.8 trillion, with growth moderated to 1.6% from the double-digit 15.9% in 2022. In a statement, Department of Statistics Malaysia (DOSM) Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said that despite the moderated performance, the economy remained resilient, particularly through private final consumption expenditure, which increased 6.7%. “The growth was propelled by ongoing enhancement in employment and wage through the implementation of a new minimum wage of RM1,500 starting May 2023,” he said. The income statistics from economic production include 3 key components, namely compensation of employees (CE), gross operating surplus (GOS) and taxes less subsidies on production and imports (net taxes). Given the improvements in the labour market, Mohd Uzir said CE recorded a steady growth of 4.2% while GOS declined by 1.8%, while the performance of the income distribution showed a shift towards a better share of CE at 33.1% compared to 32.3% in 2022. “Nevertheless, GOS still contributed substantially to the GDP at 64.8%, although 2.3% lower than the previous year. The remaining component was net taxes, which accounted for 2.1%,” he said. Looking at detailed sectoral performance, he said the increase in the CE component, encompassing the remuneration received by employees for their labour was driven by the services, manufacturing and construction sectors. “CE in the Services sector grew 4.3% supported by growth in all sub-sectors, particularly wholesale and retail trade, food and beverages and accommodation. “As for the manufacturing sector, CE registered 3.3% growth led by the moderation in electrical, electronic and optical products,” he said. Mohd Uzir added that the decline in GOS was primarily influenced by the sharp downturn in the mining and quarrying (-12.1%), agriculture (13.2%) and manufacturing (-5.6%) sectors. “The fall of commodity prices in 2023 has lowered profitability across these sectors, leading to a marked decrease in overall GOS. Nevertheless, the contraction was partially alleviated by the growth in the services and construction sectors at 5.3% and 1.3%, respectively,” he said. Net taxes showed a remarkable growth of 242% or RM37.7% in 2023, attributed to the higher taxation revenue as compared to a decrease in subsidies. In the context of international comparison, Mohd Uzir said the composition of the CE in the Southeast Asia region is notably lower, accounting for less than 40% of GDP while GOS makes up a larger share. “As opposed to advanced economies such as United States, Germany and Canada, CE constitutes a greater share than GOS at 53.1%, 52.4% and 51.1%, respectively. “Net taxes formed a smaller share of GDP in the selected countries, with Malaysia recording the lowest contribution of 2.1%, reflecting the differences of fiscal policy among countries,” he said. — BERNAMA

KUALA LUMPUR: A total 3.4 million of the 13.1 million Employees Provident Fund (EPF) members under the age of 55 have made withdrawals from the Flexible Account amounting to RM8.9 billion as of 19 July 2024. Finance Minister II Datuk Seri Amir Hamzah Azizan said that for the same period, a total of 3.8 million or 29.3% of EPF members chose to have the initial amount in the Flexible Account (Account 3) with a transfer of RM12.6 billion, while RM5.6 billion was transferred to the Retirement Account (Account 1). He said the transfer to the Retirement Account increased members’ savings, with the addition of 43,000 new members having reached the basic savings level. “Withdrawals from the Flexible Account do not significantly impact the EPF as the expected amount of withdrawals by members is within the EPF’s cash and money market allocation. “Under the current Strategic Asset Allocation, the EPF has allocated investments in cash and money market instruments between 2% and 6% of the total investment assets of the EPF,” he said. Regarding the implications for the national economy, Amir Hamzah said the initial estimate of the Flexible Account withdrawals in the first year is around RM15 billion or about 0.8% of Malaysia’s nominal gross domestic product (GDP) for 2023. “Nevertheless, the actual impact of the introduction of Flexible Account on the country’s GDP growth will depend on several factors, including the members’ spending tendencies,” he said. The minister also stressed that the restructuring of EPF accounts is aimed at improving the security of retirement income and giving members access to the Flexible Account at any time and for any purpose, especially for emergencies. “However, EPF members are advised to use withdrawals for emergencies and urgent needs only,” he added.

PUTRAJAYA: Prime Minister Datuk Seri Anwar Ibrahim wants Budget 2025, which will presented on 18 October in the Dewan Rakyat to focus on addressing and reducing the cost of living. Anwar, who also serves as the Minister of Finance (MoF), emphasised that the cost of living remains a pressing concern for the public, and it is the government’s duty to alleviate this burden. “Even though I can say that our sugar, oil, flour and cooking oil are among the cheapest, Malaysians still feel the strain. “Therefore, this Budget will not only address the issues we have been discussing but will also tackle the problems posed by cartels, monopolies and the factors driving up prices. We must address all these issues,” he said during his speech at the MoF monthly assembly for August 2024. Finance Minister Il Datuk Seri Amir Hamzah Azizan, Deputy Finance Minister Lim Hui Ying and Treasury Secretary-General Datuk Johan Mahmood Merican were also in attendance. Anwar highlighted the importance of cross-ministerial efforts led by the MoF to devise strategies and methods to reduce the cost of living. He pointed out that the rising costs are exacerbated by issues such as leakage, corruption, smuggling and cartels. “Your experience within the MoF, whether in enforcement or policy planning, is crucial. We must consider all possible methods and strategies to lower costs. “These cost increases are driven, among other factors, by leakages, corruption, smuggling and excessive profits from cartels,” he added. — BERNAMA

KUALA LUMPUR: Yong Tai Bhd will sell its 5-star Courtyard by Marriot Melaka hotel to Southern Envoy Sdn Bhd for RM160 million. According to Yong Tai, its wholly-owned subsidiary, Apple 99 Development Sdn Bhd has entered into a conditional sale and purchase agreement with Southern Envoy. It said the proposed sale of the hotel represents an opportunity for Yong Tai to immediately unlock the hotel’s value and it is expected to provide an estimated net pro forma gain on disposal of approximately RM45.86 million. “The proposed disposal will give rise to RM160 million in proceeds to be utilised by the group to repay the Apple 99’s existing bank borrowings and payment of outstanding progress claims to the main contractor, hence improving Yong Tai’s gearing level. “Upon completion of the proposed disposal, Yong Tai is able to improve its financial performance and realise a gain, thereby strengthening its cash flow and net assets position,” it said. Yong Tai said the hotel’s market value, as appraised by Nawawi Tie Leung Property Consultants Sdn Bhd, using the comparison approach and supplemented by the income approach, based on its valuation report dated 1 June 2024 of RM170 million. Meanwhile, the group also proposed a special issue of up to 30% of the total number of issued ordinary shares in Yong Tai, excluding treasury shares, to independent investors to be identified and at an issue price to be determined at a later date. It said the proposed special issue would entail the issuance of up to 190 million new shares, which was arrived at based on 30% of its enlarged issued share capital of RM843.02 million comprising 633.50 million shares. “The proposed special issue will enable the group to raise funds more expeditiously and in a more cost-effective manner as opposed to other fundraising options such as a pro-rata issuance of securities,” it noted. Yong Tai added the proposed special issue would improve the liquidity and financial flexibility of the group by strengthening its financial position. — BERNAMA