Malaysia Economic Forecast
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Malaysia was the 33rd fastest growing economy in the world for 2010, with a real GDP growth rate (constant prices, national currency) of 7.156 percent. Malaysia recovered fairly strongly from the 2008 global financial crisis where the economy declined for a brief period of time in 2009 – GDP growth (constant prices, national currency) fell to negative 1.71 percent in 2009 compared to a positive average of 5.824 percent from 2003 to 2008.
Malaysia was the 33rd fastest growing economy in the world for 2010, with a real GDP growth rate (constant prices, national currency) of 7.156 percent. Malaysia recovered fairly strongly from the 2008 global financial crisis where the economy declined for a brief period of time in 2009 – GDP growth (constant prices, national currency) fell to negative 1.71 percent in 2009 compared to a positive average of 5.824 percent from 2003 to 2008.
The Malaysian economy was boosted by the growth in services and manufacturing in 2010, which grew by 6.8 and 11.4 percent respectively. With the country recovering fairly well from the financial crisis, household spending grew by 5.3 percent in the same year. Furthermore, according to Bank Negara, ““Private sector capital spending was led by the expansion in the production of domestic-oriented industries amid high levels of capacity utilisation. Public sector capital investment rose as a result of higher development expenditure mainly in the education and transportation sectors.”
As a result, Malaysia is expected to move towards a sustainable growth path from 2011 onwards. Although structural impediments in net exports could threaten overall GDP growth for 2011, the Malaysian Institute of Economic Research firmly believes that this will be offset by domestic demand that will remain strong thanks to supportive government policy measures.
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Malaysia’s GDP Forecast
Malaysia is the 37th largest economy in the world according to GDP (current prices, US dollars) and the 30th largest economy according to GDP (PPP) in 2010. Although Malaysia’s GDP (PPP) declined slightly from US$386.234 billion in 2008 to US$383.095 billion in 2009, 2010 saw a 8.18 percent increase to US$414.428 billion.
By 2011, Malaysia’s GDP (PPP) is expected to increase even further by 6.66 percent to US$442.01 billion. Backed by solid government policies plus the continued recovery from the financial crisis, 2012 is likely to see the strongest performance in the economy where GDP (PPP) will rise by 11.7 percent to US$471.399 billion. From 2013 to 2016, Malaysia’s GDP (PPP) growth rate will increase annually from 6.4 percent in 2013 to 6.89 percent in 2016. By the end of 2016, Malaysia’s GDP (PPP) will hit US$610.814 billion – making it the 29th largest economy in the world.
Likewise, Malaysia’s GDP (PPP) per capita will see consistent growth in the next few years. In 2010, Malaysia had the 57th highest GDP (PPP) per capita in the world at US$14,669.77. From 2011 to 2015, Malaysia’s GDP (PPP) per capita will see an annual growth between 4.67 to 4.98 percent. Malaysia’s GDP (PPP) per capita growth is expected to peak in 2016 by 5.1 percent. The GDP (PPP) per capita for the end of 2016 will be US$19,541.46.
Malaysia’s Unemployment Forecast
Unemployment in Malaysia was barely affected by the 2008 global financial crisis. From 1998 to 2007, unemployment in Malaysia ranged from 3.002 percent to 3.611 percent. In 2008, the unemployment rate in Malaysia was 3.3 percent – a 0.1 percent point increase from 2007. 2009 saw unemployment peak at 3.6 percent though this number has since fallen back to 3.3 percent in 2010.
The unemployment rate in Malaysia is expected to remain fairly consistent throughout the next few years. From 2011 to 2013, the unemployment rate is expected to see a marginal improvement from year to year. Eventually, unemployment rates will remain at 3 percent from 2013 to 2016.
Malaysia’s Inflation Rate & Current Account Balance Forecast
Low and stable inflation rates have been one of the main features of the Malaysian economy in the last two decades. Malaysia’s inflation is the least volatile in South East Asia and the second lowest behind Singapore. Between 1999 to 2007, Malaysia’s average annual inflation rate (average consumer price change) was 2.076 percent. Although the financial crisis created a volatile inflation – inflation (average consumer price change) was 5.4 percent in 2008 and 0.6 percent in 2009 – inflation rates are recovering to pre-financial crisis levels. In 2010, Malaysia’s inflation (average consumer price change) was 1.7 percent. Between 2011 to 2016, the inflation rate in Malaysia is expected to hover between 2.3 percent and 2.8 percent.
Malaysia had the 14th largest current account balance in the world for 2010. Malaysia’s current account was at its peak in 2008 where the current account balance was the 9th largest in the world at US$38.854 billion. However, it fell sharply by 18.7 percent in 2009. In 2010, Malaysia’s current account balance dropped again by 11.67 percent to US$28.119 billion. From 2011 to 2016, Malaysia’s current account balance is expected to increase annually by 0.4 to 2.68 percent. By the end of 2016, Malaysia’s current account balance will reach US$31.2 billion.
