KPJ Healthcare Berhad - Annual Report 2018

32 KPJ HEALTHCARE BERHAD OUR BUSINESS ENVIRONMENT ASIA PACIFIC ECONOMY Our primary markets of operation within the Asia Pacific region are Indonesia, Bangladesh and Australia. The operations we have within these three countries account for 3% of our revenue. Asia, in particular, continues to be the main engine of growth for the global economy. According to the Regional Economic Outlook: Asia Pacific published in October 2018 by the International Monetary Fund, emerging markets such as Indonesia and Bangladesh recorded Gross Domestic Product (GDP) growth of 5.1% and 7.3% respectively, while Australia as an advanced economy, recorded slower GDP growth at 3.2%. MALAYSIAN ECONOMY The Malaysian economy is one of our primary factors for consideration as our main market of operations, with 97% of our revenue generated from our healthcare operations here. In 2018, GDP in Malaysia grew moderately at a rate of 4.7%. The national economy recorded declining inflation, and a shrinking KPJ OPERATES WITHIN A COMPLEX EXTERNAL ENVIRONMENT, WHICH IS SHAPED BY VARIOUS GEO-POLITICAL, MACROECONOMIC AND REGULATORY FACTORS, AS WELL AS INDUSTRY TRENDS. TO ENSURE WE REMAIN ON TRACK WITH OUR VALUE CREATION STRATEGIES, WE DILIGENTLY MONITOR AND ASSESS THE LIKELY IMPACTS THESE FACTORS WILL HAVE ON OUR GROUP. THROUGHOUT THE YEAR 2018, THE FOLLOWING FACTORS PLAYED THE MOST SIGNIFICANT IMPACT ON OUR OPERATIONAL LANDSCAPE. current account surplus in the first half of the year. Sluggish domestic investment and exports offset stronger private consumption while unemployment remained stable, and broad based growth was seen in all sectors. Sluggish economic growth led to many corporates downsizing and reducing their employees’ medical benefits coverage which had an impact on private healthcare providers. This led to people opting to obtain healthcare provision from general practitioners (GP) or cheaper private healthcare providers in their bid to reduce their personal healthcare costs. KEY HIGHLIGHTS 97% OF OUR REVENUE generated from our healthcare operations in Malaysia RANKED 1 ST as world’s best healthcare in 2019 ASIA PACIFIC ECONOMY (GDP) 7.3% 3.2% 4.7% 5.1% Indonesia Bangladesh Australia Malaysia