Sarawak to transition into an economic powerhouse
Published on: Monday, February 19, 2024
By: Bernama
Sarawak is aiming to achieve a GDP of RM282 billion by 2030 as targeted in its post-Covid-19 development strategy.
PETALING JAYA: RHB Research anticipated Sarawak to transition into an economic powerhouse as it viewed that catalytic infrastructure enhancement would take place in light of the higher development expenditure allocated for the state.
This is further backed by the state’s post-Covid-19 development strategy 2030 which aims to reach a gross domestic product (GDP) of RM282 billion by 2030.
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The research house identified a few key infrastructure components to look out for in Sarawak such as water projects, transportation projects such as the Kuching Autonomous Rapid Transit and highways, renewable energy (RE) projects like hydropower, and potential data centre setups.
“New oil well discoveries offshore Sarawak combined with its location to be a prime spot for carbon capture and storage may also drive the demand for related infrastructures,” it said in a statement.
The research firm also said that Sarawak is in a sweet spot to gain from foreign investments as the state had the most competitive unsubsidised electricity tariffs in Asean and business-friendly policies, while abundant RE sources have enabled it to attract foreign investors.
“Sarawak recorded RM14.6 billion worth in terms of the value of construction work done in 2023, the fourth largest after Selangor, Federal Territory, and Johor, representing a five-year compound annual growth rate of 4.5%, which is commendable in comparison to most other states, which saw a decline,” it said.
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In 2022, Sarawak recorded the fifth largest value of construction projects among the states in Malaysia, at RM9.9 billion.
Meanwhile, RHB said KKB Engineering is its top pick for the Sarawak plays under its coverage given its diverse infrastructure exposure, followed by IJM Corp which is gradually regaining its footprint in the state.
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It also took note of Gamuda’s track record in Sarawak via the Pan Borneo Highway and Second Trunk Road projects, and Ibraco as a non-rated idea for Sarawak.
The key risks for its recommendation included unforeseen pandemic outbreaks and an unexpected downward revision in the development expenditure for the state.
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