Malaysia Economic Structure

March 16, 2010Malaysiaby EconomyWatch Content


Malaysia has emerged as a multi-sector economy in the 21st century from being a producer of raw materials until 1970. Efforts are being made by the government to promote value-added production by luring foreign investment in pharmaceuticals, technology industries and medical technology. Some major industries in Malaysia are electronics, electrical products, chemicals, food and beverages, metal and machine products and apparel. Malaysian exports played primary role in the country’s economic growth. In the last two decades of the 20th century, Malaysia experienced an annual GDP growth of 7% along with low inflation. In 2009, the nominal per capita GDP stood at US$6,761 and the nominal GDP at US$191.4 billion.


The following graph depicts GDP by sector as of 2009:


Malaysia' s GDP by sector 2009 


Malaysia Economic Structure

The economic structure of Malaysia can be divided into the following sectors:


Primary Sector: Malaysia’s economic development is largely due to its wealth of natural resources in agriculture and forestry. Some major produces in the country include:

  • Peninsular Malaysia: Cocoa, Rice, Rubber, Palm and Oil

  • Sabah: Coconuts, Rice, Rubber, Subsistence Crops and Timber

  • Sarawak: Rubber, Pepper and Timber

Palm oil and rubber are the major foreign exchange earners in the primary sector. In the 1960s, the country’s forest reserves depleted at a high rate. Active steps have been taken to plant high-value trees and various timber species.


Secondary Sector: Malaysia’s diversified manufacturing sector is the backbone of its economy. The growth of the manufacturing sector is visible in its 30% contribution to the GDP in 1999 as compared to 13.9% in 1970. Malaysia has abundant natural resources including minerals, liquefied natural gas (LNG), petroleum and tin. The oil production stood at 727,200 bbl/day in 2008. Electronic components contribute a significant share in Malaysia’s manufactures and exports. It is the largest exporter of semiconductor devices and electrical goods and appliances in the world.


Tertiary Sector: The service sector of Malaysia predominantly comprises Islamic banking, finance, telecommunications and tourism. In an effort to attract foreign direct investment, Malaysian Prime minister Najib Tun Razak introduced a variety of measures for this sector. There are expectations of Malaysian IT spending to be at $4.5bn in 2010 from US$4.2bn in 2009 due to economic recovery.




blog comments powered by Disqus