FITA helps you find
service providers for:

Market Research


flag Malaysia Malaysia: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

After reducing strongly under the influence fo the global crisis, growth rate recovered as early as 2010 (7.2%), driven by the dynamic private consumption and the improvement in domestic investment. In 2013, growth was estimated to reach 4.7%, driven by private investment and an improvement in foreign trade. For 2014 outlook predicts a growth of around 4.5-5.5% because of the impact of inflation on household consumption and a weak global recovery.

Malaysia has the highest debt levels in the region, with spending increasing faster than GDP and the budgetary deficit has been worsening, 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). The objective of this plan is to double per capita income by 2020. The 2014 budget is trying to reduce the deficit and debt. The aim is to balance the budget by 2020 and maintain debt under 55% of the GDP. The budget involves a programme of remittances, bonuses and welfare aid; a reduction of income tax; an increase of property taxation; measures to simplify access to affordable housing; the introduction of a VAT in 2015; reduction of subsidies; and infrastructure projects.

Malaysia has one of the highest living standards in South-East Asia and a very low unemployment rate (3%).  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 20112012201320142015 (e)
GDP (billions USD) 289.34304.96313.16e336.91375.63
GDP (Constant Prices, Annual % Change) 5.25.64.75.9e5.2
GDP per Capita (USD) 9,95610,3311011,06212,127
General Government Balance (in % of GDP) -3.2-3.8-4.6-3.9e-3.0
General Government Gross Debt (in % of GDP) 54.256.257.7e56.654.9
Inflation Rate (%) 3.21.72.12.94.1
Unemployment Rate (% of the Labor Force) 3.13.03.13.03.0
Current Account (billions USD) 33.4717.6412.3314.5615.85
Current Account (in % of GDP) 11.65.83.9e4.34.2

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

Agriculture employs around 13.5% of Malaysians and contributes to 12% of the GDP. Malaysia ranks 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 and it is currently the 9th largest tourist destination in the world.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 12.6 28.4 59.0
Value Added (in % of GDP) 9.3 40.5 50.2
Value Added (Annual % Change) 1.9 3.6 7.0

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Malaysian Ringgit (MYR) - Average Annual Exchange Rate For 1 USD 3.523.223.063.093.15

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about Malaysia on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
69.6/100
Position:
Moderately Free
World Rank:
37/178
Regional Rank:
9/25

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
7.56
World Rank:
19/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

Return to top

Foreign Trade in Figures

Malaysia is well known for its openness to international trade. Foreign trade represents 166.5% of the country’s GDP (WTO, 2010-2012).

The trade balance is structurally positive. However, the surplus has been declining because exports are growing less rapidly than importas and the prices of the country's exports (palm oil, gas, rubber) are continuing to decline. The surplus decreased from 96b RM in 2012 to 70.6b RM in 2013. Exports should improve in 2014. 

The country mainly exports electric and electronic equipment, machinery, mineral fuels and hydrocarbons, animal and vegetable oils and fats, wood and charcoal. The country mainly imports electric and electronic equipment, machinery, fuels and oils, plastic products, iron and steel. Its main trade partners are the United States, Singapore and Japan, followed by China and the European Union.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 123,832164,622187,473196,393206,014
Exports of Goods (million USD) 157,433198,612228,086227,388228,276
Imports of Services (million USD) 27,25732,07637,71441,96943,936
Exports of Services (million USD) 28,72731,71335,76037,53439,201
Imports of Goods and Services (Annual % Change) -12.715.66.22.52.0
Exports of Goods and Services (Annual % Change) -10.911.14.5-1.80.6
Imports of Goods and Services (in % of GDP) 71.176.375.173.772.4
Exports of Goods and Services (in % of GDP) 91.493.391.585.381.7
Trade Balance (million USD) 40,73142,30149,54940,71932,494
Trade Balance (Including Service) (million USD) 41,55141,85147,51936,18427,724
Foreign Trade (in % of GDP) 162.6169.7166.6158.9154.1

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
Singapore 13.9%
China 13.5%
Japan 11.0%
United States 8.1%
Thailand 5.5%
See More Countries 48.0%
Main Suppliers
(% of Imports)
2013
China 16.4%
Singapore 12.4%
Japan 8.7%
United States 7.8%
Thailand 6.0%
See More Countries 48.8%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies 12.2%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 9.0%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 8.5%
Palm oil and its fractions, whether or not refined...Palm oil and its fractions, whether or not refined (excl. chemically modified) 5.4%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 4.5%
See More Products 60.4%
- bn USD of products imported in 2013
Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies 12.9%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 10.7%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 3.5%
Powered aircraft e.g. helicopters and aeroplanes;...Powered aircraft e.g. helicopters and aeroplanes; spacecraft, incl. satellites, and suborbital and spacecraft launch vehicles 2.0%
Copper, refined, and copper alloys, unwrought ...Copper, refined, and copper alloys, unwrought (excl. copper alloys of heading 7405) 1.9%
See More Products 68.9%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

Source: Comtrade, Last Available Data

Return to top

Sources of General Economic Information

Ministries
Ministry of Finance
Ministry of International Trade and Industry
Central Bank
Statistical Office
Department of Statistics Malaysia
Central Bank
Central Bank of Malaysia
Stock Exchange
Kuala Lumpur Stock Exchange
Search Engines
Cari
Ada
Catcha
FounderNet
Malaysia Directory
Economic Portals
Business Times

Return to top

Political Outline

Executive Power
The head of state is the Paramount Ruler, commonly referred to as the King. The King is selected from nine hereditary rulers (called Sultans) of the Malay states to serve a five-year term; the other four states (which have titular Governors) do not participate in the selection. Following legislative elections, the leader of the party that wins most seats in the lower house of the parliament becomes the Prime Minister to serve a five-year term, subject to approval by the King. The Prime Minister is the head of the government and holds the executive powers which include implementation of the law and running the day-to-day affairs of the country . The Cabinet is appointed by the Prime minister from among the members of parliament with the consent of the Paramount Ruler.
Legislative Power
The legislature in Malaysia is bicameral. The parliament consists of: the Senate (the upper house) having 69 seats, out of which 43 appointed by the Paramount Ruler and 26 appointed by the 13 state assemblies to serve six-year terms; and the House of Representatives (the lower house) having 219 seats. Its members are elected by popular vote to serve five-year terms. The King can dissolve parliament if he wishes but usually only does so upon the advice of the Prime Minister. In general, more power is vested in the executive branch of government than in the legislative. The legislative power is divided between federal and state legislatures. Each state has its own government, a cabinet with executive authority, and a legislature that deals with matters not reserved for the federal parliament. The people of Malaysia have limited political rights.
Main Political Parties
Malaysia is a country with one dominant party. The UMNO (National Organization for a United Malaysia) is the largest political party in the country. It has ruled the country uninterruptedly since its independence from the UK in 1957. UMNO is known for being a major proponent of Malaysian nationalism and Islamic ideology. UMNO rules the country through a coalition called BN (National Front); its other two prominent members are:
- MCA (Malaysian Chinese Association) – a party of Chinese who are citizens or long-term residents of Malaysia;
- MIC (Malaysian Indian Congress) – representing the Indian community in Malaysia;
- Opposition parties are allowed, but are widely considered to have no real chance of gaining power.
Current Political Leaders
Paramount Ruler: King - Tuanku Abdul HALIM Mu'adzam Shah (since 11 April 2012);
Prime Minister: Mohamed NAJIB bin Abdul Najib (since April 2009) – UMNO, heading the BN coalition government.
Next Election Dates
Paramount Ruler: 2016
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
147/180
Evolution:
2 places down compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
4/7

Map of freedom 2014
Source: Freedom House

 

Return to top

Any Comments About This Content? Report It to Us.

 

© Export Entreprises SA, All Rights Reserved.
Last Updates: February 2015