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OVERVIEW OF
MALAYSIAN
ECONOMY
 Objektives:

• Introduction
• Past works
• Rationale
• Growth & Structural Change
• Main Arguments

Pasaran Wang & Modal: Perspektif Malaysia

 Economics

• Why are some countries rich and some

countries poor? 
• Why do women earn less than men?
• How can data help us understand the world?
• Why do we ignore information that could help
us make better decisions?
• What causes recessions?
• Economics can help us answer these questions.
• Economics can be defined in a few different ways.
• It’s the study of scarcity, the study of how people use
resources and respond to incentives, or the study of decision-
making.
• It often involves topics like wealth and finance, but it’s not all
about money.
• Economics is a broad discipline that helps us
understand historical trends, interpret today’s headlines,
and make predictions about the coming years.
•
• Economics ranges from the very small to the very
large.
• The study of individual decisions is
called microeconomics.
• The study of the economy as a whole is
called macroeconomics.
• A microeconomist might focus on families’
medical debt, whereas a macroeconomist might
focus on sovereign debt.
 ECONOMIC AND FINANCIAL DATA
FOR MALAYSIA
• Refer: http://www.bnm.gov.my/index.php?
ch=statistic_nsdp&uc=2.

• Last updated: 14 Feb 2020

 Malaysian Experience

• Since gaining independence in 1957, Malaysia

has successfully diversified its economy from one
that was initially agriculture and commodity-
based, to one that now plays host to robust
manufacturing and services sectors, that have
propelled it to become a leading exporter of
electrical appliances, electronic parts and
components.
• Malaysia is one of the most open economies in
the world, with a trade to GDP ratio averaging
over 130 percent since 2010.
• Openness to trade and investment have been
instrumental in employment creation and income
growth, with about 40 percent of jobs in Malaysia
linked to export activities.
• After the Asian financial crisis of 1997-1998,
Malaysia’s economy has been on an upward
trajectory, averaging growth of 5.4 percent since
2010, and is expected to achieve its transition
from an upper middle-income economy to a high-
income economy by 2024.
• With less than 1 percent of Malaysian
households living in extreme poverty, and the
government’s focus has shifted toward
addressing the well-being of the poorest 40
percent of the population (“the bottom 40”).
• This low-income group remains particularly
vulnerable to economic shocks as well as
increases in the cost of living and mounting
financial obligations.
• Income inequality in Malaysia remains high
relative to other East Asian countries but is
gradually declining.
• For example, from 2009 to 2014 the real average
household incomes of the bottom 40 grew at 11.9
percent per year, compared to 7.9 percent for the
total population of Malaysia, thus narrowing
income disparities.
• Following the removal of broad-based subsidies,
the government has gradually moved toward
more targeted measures to support the poor and
vulnerable, mainly in the form of cash transfers to
low-income households.
• Malaysia’s near-term economic outlook will be more
dependent on government measures to sustain
private sector activity as an increasingly challenging
external environment reduces opportunity for
export-led growth, and reduced fiscal space limits
the scope for public investment-led expansion.
• Over the longer term, as Malaysia converges with
high-income economies, incremental growth will
depend less on factor accumulation, and more on
raising the level of productivity to sustain higher
potential growth.
• While significant, Malaysia’s productivity growth
over the past 25 years has been below those of
several global and regional comparators.
• Ongoing reform efforts to tackle key structural
constraints will be vital to support and sustain
Malaysia’s development path. 
• According to the World Bank’s Human Capital
Index, Malaysia ranks 55th out of 157 countries.
• To fully realize its human potential and fulfil the
country’s aspiration of achieving high-income and
developed country status, Malaysia will need to
make further advances in education, health and
nutrition, and social protection outcomes.
• Key priority areas include enhancing the quality
of schooling to improve learning outcomes,
rethinking nutritional interventions to reduce
childhood stunting, and providing adequate social
welfare protection to enable households to invest
in human capital formation.
 Improving the quality of growth

• Malaysia’s economy is doing well, but social

and governance challenges must be
addressed.
• The government prioritises inclusive growth and
improving trust in public institutions.
• Further progress toward the planned target of
high-income country status by 2024 will also
require focusing on productivity growth with
structural reforms to move up the value chain and
improve skills.
• As well, ensuring environmental protection will
improve the quality of growth.
• These issues are in line with the government’s
priorities.
• To strengthen anti-corruption measures, the
government launched the National Anti-
Corruption Plan 2019-2023 in January 2019 that
encompasses measures promoting transparency
and accountability at all levels, strengthening
effectiveness of public service delivery, and
integrity in business.
Q & A…..

Malaysian Economy
 Pasaran Wang & Modal: Perspektif Malaysia

Terima kasih

&

Semoga Berjaya

Malaysian Economy