KUALA LUMPUR, Oct 10 (Bernama) — The finance and insurance sub-sector is expected to sustain growth at 1.8 per cent in 2014 after having moderated to 1.5 per cent in the first half of the year. The finance segment rose 1.4 per cent during the first six months of this year due to the slower growth in net interest and fee-based income, said the Finance Ministry in the 2014/2015 Economic Report released Friday. The report is issued in conjunction with the tabling of the 2015 Budget Friday by Prime Minister Datuk Seri Najib Tun Razak, who is also Finance Minister.
In the first seven months of this year, total loan applications contracted to 1.9 per cent to RM463 billion while total loans approved declined 2.4 per cent to RM223 billion, partly due to macroprudential measures to rein in household debt. The insurance segment, meanwhile, moderated to 1.8 per cent during the first six months of this year following the slower performance in the life insurance business. >From January to July, new premiums for life insurance decreased a marginal 0.6 per cent to RM4.7 billion due to a slight decline in ordinary life insurance premiums.
Meanwhile, the various cooling measures introduced to curb rising property prices and speculative activities have started to gain traction. This was reflected in the slower increase in residential property prices at 8.1 per cent while transactions fell 2.7 per cent in the first half of the year. As for the business services sub-sector, the segment recorded 8.9 per cent growth for the first six months of this year driven by higher demand for professional services, particularly engineering services in the construction sector, as well as, computer services.