As of the present, Malaysia maintains a moderately strong economy, driven by diverse sectors that contribute to its overall growth. The nation possesses a well-established industrial base, notably in electronics, automotive, and palm oil production. Moreover, Malaysia continues to actively engage in global trade, successfully attracting foreign investments.
How is the economy in Malaysia in 2023?
Throughout the initial three quarters of 2023, the Malaysian economy demonstrated growth, expanding by 3.9%. In the same period, headline inflation experienced a moderation to 2%, compared to 2.8% in the second quarter of 2023. This moderation was observed in both non-core and core inflation, with fresh food and fuel playing significant roles in the decline of non-core inflation.
Growth of economy in Malaysia
Despite the difficulties posed by the global environment, there are expectations for the Malaysian economy to achieve a growth rate of approximately 4% in 2023 and a range of 4% to 5% in 2024.
Economy of Malaysia: tourism and hospitality
In 2022, the direct contribution of the tourism industry to Malaysia's gross domestic product (GDP) stood at 2.7 percent. While tourism typically constitutes one of the most substantial contributors to the Malaysian GDP, the sector experienced a significant downturn in 2020 and 2021 due to the impacts of the COVID-19 pandemic and the implemented containment measures.
Digital economy in Malaysia
Malaysia's digital economy is experiencing a notable upswing. In 2021, the information and communication technology (ICT) sector played a significant role by contributing 23.2% or approximately RM217.1 billion to the national gross domestic product (GDP). This contribution comprised 14% from various ICT sub-sectors and 9.2% from e-commerce embedded in other industries. The four key ICT sub-sectors encompass ICT manufacturing, ICT trade and services, content, and media.
Remarkably, the ICT sector emerged as the third-largest contributor to the national GDP, surpassing the combined value of the entire agriculture and construction sectors. This underscores the pivotal role of the ICT industry not only in a post-pandemic landscape but also in an increasingly digital and knowledge-centric society.
Furthermore, the momentum in the ICT sector has persisted beyond 2021, with projections indicating a trajectory towards contributing at least 25.5% to Malaysia's GDP by 2025.
Circular economy of Malaysia
Malaysia has actively embraced the concept of the circular economy through the implementation of diverse policies. These include the National Sustainable Consumption and Production Blueprint 2016, National Solid Waste Management Policy 2016, Malaysia Plastics Sustainability Roadmap 2021-2030, and National Cleanliness Policy 2020-2030.
Malaysia vs Indonesia economy
Indonesia and Malaysia exhibit distinctions across various economic indicators. In terms of currency, Indonesia utilizes the Indonesian rupiah (1 IDR = 100 Sen), while Malaysia's currency is the ringgit (1 MYR = 100 Sen).
Looking at employment metrics, Indonesia reports a slightly lower unemployment rate at 3.6% compared to Malaysia's 3.7%. Inflation rates also vary, with Indonesia at 4.21% and Malaysia slightly lower at 3.38%.
When considering the cost of living, Indonesia's index is 33.11%, while Malaysia's is marginally higher at 35.19%. Commercial taxes and contributions present another contrast, with Indonesia at 30.10% and Malaysia exhibiting a relatively higher rate of 38.70%.
Average income in Indonesia is notably lower at 4,580 US$, contrasting with Malaysia's higher average income of 11,780 US$. Turning to government debt, Indonesia's central government debt stands at 39.48% of GDP, lower than Malaysia's 60.37%. Additionally, Indonesia's general government debt is 39.93% of GDP, while Malaysia reports a higher figure at 66.27%.
Lastly, on the corruption index, Indonesia is rated at 66 (considered bad), while Malaysia's rating is slightly better at 53 (also considered bad).