Malaysia: Economy#

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. Malaysia is vulnerable to a fall in world commodity prices or a general slowdown in global economic activity.

The NAJIB administration is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil, and rubber - remain a significant driver of the economy. Gross exports of goods and services constitute more than 80% of GDP. The oil and gas sector supplied about 29% of government revenue in 2014. As an oil and gas exporter, Malaysia has previously profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with sustained budget deficits, has forced Kuala Lumpur to begin to address fiscal shortfalls, through initial reductions in energy and sugar subsidies and the announcement of the 2015 implementation of a 6% goods and services tax. Falling global oil prices in the second half of 2014 have strained government finances, shrunk Malaysia’s current account surplus and put downward pressure on the ringgit. The government is trying to lessen its dependence on state oil producer Petronas.

Bank Negara Malaysia (the central bank) maintains healthy foreign exchange reserves; a well-developed regulatory regime has limited Malaysia's exposure to riskier financial instruments and the global financial crisis. In order to attract increased investment, NAJIB raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but retreated in 2013 after he encountered significant opposition from Malay nationalists and other vested interests. In September 2013 NAJIB launched the new Bumiputra Economic Empowerment Program, policies that favor and advance the economic condition of ethnic Malays.

Malaysia is a member of the 12-nation Trans-Pacific Partnership free trade agreement negotiations and, with the nine other ASEAN members, will form the ASEAN Economic Community in 2015.

Economic Facts#

GDP (purchasing power parity)$863.8 billion (2016 est.)
$828.2 billion (2015 est.)
$789 billion (2014 est.)
note: data are in 2016 dollars
GDP (official exchange rate)$302.7 billion (2015 est.)
GDP - real growth rate4.3% (2016 est.)
5% (2015 est.)
6% (2014 est.)
GDP - per capita (PPP)$27,200 (2016 est.)
$26,600 (2015 est.)
$25,700 (2014 est.)
note: data are in 2016 dollars
Gross national saving27.4% of GDP (2016 est.)
28.1% of GDP (2015 est.)
29.4% of GDP (2014 est.)
GDP - composition, by end usehousehold consumption: 55.2%
government consumption: 12.9%
investment in fixed capital: 26%
investment in inventories: 0.1%
exports of goods and services: 66.5%
imports of goods and services: -60.7% (2016 est.)
GDP - composition, by sector of originagriculture: 8.2%
industry: 37.8%
services: 54% (2016 est.)
Agriculture - productsPeninsular Malaysia - palm oil, rubber, cocoa, rice; Sabah - palm oil, subsistence crops; rubber, timber; Sarawak - palm oil, rubber, timber; pepper
IndustriesPeninsular Malaysia - rubber and oil palm processing and manufacturing, petroleum and natural gas, light manufacturing, pharmaceuticals, medical technology, electronics and semiconductors, timber processing; Sabah - logging, petroleum and natural gas production; Sarawak - agriculture processing, petroleum and natural gas production, logging
Industrial production growth rate4.2% (2016 est.)
Labor force14.77 million (2016 est.)
Labor force - by occupationagriculture: 11%
industry: 36%
services: 53% (2012 est.)
Unemployment rate3.3% (2016 est.)
3.2% (2015 est.)
Population below poverty line3.8% (2009 est.)
Household income or consumption by percentage sharelowest 10%: 1.8%
highest 10%: 34.7% (2009 est.)
Distribution of family income - Gini index46.2 (2009)
49.2 (1997)
Budgetrevenues: $52.66 billion
expenditures: $63.01 billion (2016 est.)
Taxes and other revenues17.4% of GDP (2016 est.)
Budget surplus (+) or deficit (-)-3.4% of GDP (2016 est.)
Public debt55.1% of GDP (2016 est.)
54.5% of GDP (2015 est.)
note: this figure is based on the amount of federal government debt; this includes Malaysian Treasury bills and other government securities, as well as loans raised externally and bonds and notes issued overseas; this figure excludes debt issued by non-financia
Fiscal yearcalendar year
Inflation rate (consumer prices)2% (2016 est.)
2.1% (2015 est.)
note: approximately 30% of goods are price-controlled
Central bank discount rate3% (31 December 2011)
2.83% (31 December 2010)
Commercial bank prime lending rate4.4% (31 December 2016 est.)
4.57% (31 December 2015 est.)
Stock of narrow money$91.28 billion (31 December 2016 est.)
$83.97 billion (31 December 2015 est.)
Stock of broad money$478.7 billion (31 December 2014 est.)
$440.3 billion (31 December 2013 est.)
Stock of domestic credit$437.1 billion (31 December 2016 est.)
$390.7 billion (31 December 2015 est.)
Market value of publicly traded shares$383 billion (31 December 2015 est.)
$459 billion (31 December 2014 est.)
$500.4 billion (31 December 2013 est.)
Current account balance$3.646 billion (2016 est.)
$8.874 billion (2015 est.)
Exports$167.3 billion (2016 est.)
$175.7 billion (2015 est.)
Exports - commoditiessemiconductors and electronic equipment, palm oil, petroleum and liquefied natural gas, wood and wood products, palm oil, rubber, textiles, chemicals, solar panels
Exports - partnersSingapore 13.9%, China 13%, Japan 9.5%, US 9.4%, Thailand 5.7%, Hong Kong 4.7%, India 4.1% (2015)
Imports$139.5 billion (2016 est.)
$147.7 billion (2015 est.)
Imports - commoditieselectronics, machinery, petroleum products, plastics, vehicles, iron and steel products, chemicals
Imports - partnersChina 18.8%, Singapore 12%, US 8.1%, Japan 7.8%, Thailand 6.1%, South Korea 4.5%, Indonesia 4.5% (2015)
Reserves of foreign exchange and gold$97.38 billion (31 December 2016 est.)
$95.29 billion (31 December 2015 est.)
Debt - external$187.5 billion (31 December 2016 est.)
$186.5 billion (31 December 2015 est.)
Stock of direct foreign investment - at home$154.7 billion (31 December 2016 est.)
$144.7 billion (31 December 2015 est.)
Stock of direct foreign investment - abroad$155.6 billion (31 December 2016 est.)
$145.6 billion (31 December 2015 est.)
Exchange ratesringgits (MYR) per US dollar -
4.079 (2016 est.)
3.91 (2015 est.)
3.91 (2014 est.)
3.27 (2013 est.)
3.09 (2012 est.)