Economic Trends/Outlook in Malaysia

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Economic Overview

The growth rate of GDP remained high until the first half of 2008 (6% in average), after that, it suffered the effects of the global crisis and was strongly reduced in 2009 (-1.7%).  The effects of the crisis were softened by a important budgetary stimulus plan.  The growth, estimated at 6.7% of the GDP, bounced back in 2010, with the support of the dynamic private consumption and the recovery of domestic investment. 

The budgetary deficit has a tendency to increase, mainly due to the need of compensating the weakness of private investment and also because the public debt has highly increased.  To face this problem, the government has launched a program to perform a progressive revision of subventions in order to reduce its expenditures.  The objective is to bring the budget deficit to 3% of GDP by 2015.  In addition, the "New Economic Model" (NEM) intended to promote innovation and to increase production profits, was launched together with the tenth five-year plan (2011-2015). 

Malaysia has one of the highest living standards in South-East Asia and a very low unemployment rate.  However, the objective of NEM is to double the income per capita from now until 2020.  Despite the government's long-term efforts to improve the economic situation of native Malays, the population of Chinese origin continues to maintain its traditional dominance.

Main Indicators 2009 2010 2011 2012 2013
GDP (billions USD) 192.96 237.96e 247.78e 267.75e 288.98e
GDP (Constant Prices, Annual % Change) -1.7 7.2e 5.5e 5.2e 5.1e
GDP per Capita (USD) 6,917 8,423e 8,624e 9,164e 9,725e
General Government Balance (in % of GDP) -5.8 -5.6e -5.6e -4.9e -4.6e
General Government Gross Debt (in % of GDP) 55.4 54.2e 55.1e 55.8e 56.5e
Inflation Rate (%) 0.6 1.7e 2.8e 2.5e 2.4e
Unemployment Rate (% of the Labor Force) 3.6 3.3e 3.2e 3.1e 3.0e
Current Account (billions USD) 31.99e 32.77e 33.67e 34.72e -
Current Account (in % of GDP) 16.7e 15.4e 14.7e 14.0e -

Source: IMF - World Economic Outlook Database

Note: (e) Estimated Data


Main Sectors of Industry

Agriculture employs around 15% of Malaysians and contributes to 10% of the GDP. Malaysia is ranked amongst the world's main producers of palm oil, cocoa, and rubber. The country is also one of the main exporters of tropical wood. Malaysia has successfully developed its economy based on raw materials (the export of rubber and tin, significant reserves of oil and gas, copper and bauxite).

Industry contributes to around 40% of the GDP.  Malaysia is one of the world's largest exporters of semi-conductor devices, electrical goods and appliances, and the government has ambitious plans to make of Malaysia the main producer and developer of high-tech products, including software. Malaysia is a major outsourcing destination for components manufacturing after China and India. The country has attracted significant foreign investments which have played a major role in the transformation of Malaysia's economy.

The tertiary sector accounts for nearly half of the GDP, which is due mainly to the tourism sector. Malaysia has become one of South-East Asia's major tourist destinations.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 14.8 28.5 56.7
Value Added (in % of GDP) 9.5 44.3 46.2
Value Added (Annual % Change) 0.4 -6.6 1.9

Source: World Bank - Last Available Data.

For more detailed background on Industries in Malaysia, click here.

Indicator of Economic Freedom

Moderately free
World Rank:
Regional Rank:

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation


Country Risk

See the Country Risk Analysis Provided By Ducroire.


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