KOTA KINABALU: Sabah’s economic growth in 2021 is expected to show a recovery trend and will grow slowly but at a positive rate of 3.8 per cent to 4 per cent.

State Finance Minister Datuk Seri Hajiji Noor said despite Sabah was not exempted from the the negative impacts caused by the COVID-19 virus, but various initiatives implemented by the Government, the negative growth of various sectors in 2020 has showed positive growth in year 2021.

“The State Government has taken various effective measures to cushion the negative impact of the COVID-19 pandemic and restimulate the growth of the Sabah economy.

“Various initiatives which have been and are being implemented by the State Government, including reopening the economic sectors and allowing cross-district and states activities.

“In addition, the implementation of the National Recovery Plan and various stimulus packages by the Federal Government has successfully accelerated efforts in Sabah’s economic recovery,” he said when tabling Sabah 2022 Budget on Dec 3.

As for the value of Sabah’s Gross Domestic Product (GDP), it had decreased by 9.5 per cent from RM85.6 billion in 2019 to RM77.5 billion in 2020.

Sabah’s Per Capita Income has also reduced to RM21,626 in 2020 compared to RM25,375 in 2019.

“This is driven by the negative growth of all main economic sectors of the State in the year 2020.”

Construction sector, the most affected

The Construction Sector was among the most affected sectors, which recorded negative growth rate of 29.1 per cent in 2020.This was driven by the negative growth in civil engineering and non-residential buildings sub-sectors.

Conditions of compliance with Standard Operating Procedure (SOP) and the reduction in the number of workers allowed on construction sites during the period of the Movement Control Order (MCO) influenced the slowdown in the growth of this sector.

The Mining and Quarrying Sector also recorded negative growth of 13.5 per cent in 2020 due to the decline in crude petroleum and natural gas extraction activities.

The Services Sector’s growth has recorded a drop to 7.4 per cent in the year 2020 due to the slowdown in the growth of the Wholesale and Retail Trade sub-sector; Accommodation and Food & Beverage; Transportation & Storage; as well as Real Estate & Business Services.

A decrease of 76.7 per cent of tourist arrivals

The slowdown in tourism activities due to the COVID-19 pandemic directly affected the decline of growth of all these subsectors. The tourism industry has the most significant impact throughout the pandemic.

This is reflected in the number of tourist arrivals to Sabah, which decreased drastically from 4.2 million people in 2019 to only 977,460 people in 2020, a decrease of 76.7 per cent. The number of tourists has significantly decreased to 156,535 as of October 2021.

Other sectors

The Agriculture Sector recorded negative growth of 6.6 per cent in the year 2020. This was affected by the decline in the crop sub-sector, particularly in oil palm production and the slowdown in forestry and logging activities.

The growth of the Manufacturing Sector decreased by 6.5 per cent last year. The decline in the manufacturing of crude palm oil and refined palm oil for the group of oils and fats sub-sector from vegetable and animal contributed to the contraction in the growth of this sector.

COVID-19 pandemic also hampered Sabah’s trade activities with the State’s major trading partners. Sabah’s total export value has decreased by 16 per cent from RM49.2 billion in 2019 to RM41.3 billion in 2020.

Meanwhile, Sabah’s import value increased by 7.9 per cent to RM38.1 billion in 2020 compared to RM35.3 billion in the previous year.

Nevertheless, Sabah still recorded a positive trade surplus of RM3.3 billion in the year 2020.
Sabah’s inflation rate in the year 2020 was also recorded a decline to negative 1.9 per cent from 0.2 per cent in the year 2019.