Economy of Malaysia

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Economy of Malaysia

Currency	Malaysian ringgit (MYR, RM)
Fiscal year	Calendar year
Trade organisations	WTO, APEC, ASEAN, EAS, IMF, World Bank
Statistics
Population	32.7 million (2021)
GDP	$372.7 billion (nominal, 2021)
GDP growth	3.1% (2021)
GDP by sector	Agriculture: 7.1%, Industry: 37.8%, Services: 55.1% (2021)
Inflation (CPI)	2.5% (2021)
Population below poverty line	5.6% (2020)
Gini coefficient	41.1 (2019)
Labour force	15.9 million (2021)
Unemployment	4.8% (2021)
Main industries	Electronics, automotive, construction, palm oil, petroleum, natural gas, rubber, timber
External
Exports	$299.3 billion (2021)
Export goods	Electronics, petroleum, liquefied natural gas, chemicals, machinery, optical and scientific equipment, palm oil, rubber, timber
Main export partners	China 15.5%, Singapore 13.9%, United States 11.1%, Hong Kong 6.6%, Japan 6.4% (2021)
Imports	$238.1 billion (2021)
Import goods	Electronics, machinery, petroleum products, plastics, vehicles, iron and steel products, chemicals
Main import partners	China 23.1%, Singapore 10.9%, United States 8.1%, Japan 7.7%, Taiwan 5.1% (2021)
Public finances
Government debt	67.6% of GDP (2021)
Revenues	$65.3 billion (2021)
Expenses	$82.1 billion (2021)
Foreign reserves	$116.2 billion (2021)
All values, unless otherwise stated, are in US dollars.

The economy of Malaysia is the fourth largest in Southeast Asia, after Indonesia, Thailand, and the Philippines. It is a newly industrialized market economy that is relatively open and state-oriented. Malaysia has a GDP of $372.7 billion (nominal, 2021), making it the 36th largest economy in the world.

Economic History

Malaysia's economic history can be traced back to the early 20th century when it was a major exporter of rubber and tin. The country diversified its economy in the 1970s and 1980s, moving towards manufacturing and services. The New Economic Policy (NEP) was introduced in 1971 to promote economic growth and address socio-economic disparities.

Sectors

Agriculture

Agriculture contributes 7.1% to Malaysia's GDP. The country is one of the world's largest producers of palm oil, rubber, and timber. Other significant agricultural products include cocoa, pepper, and tropical fruits.

Industry

The industrial sector accounts for 37.8% of GDP. Key industries include electronics, automotive, construction, petroleum, and natural gas. Malaysia is a significant exporter of semiconductors and electronic components.

Services

The services sector is the largest contributor to GDP, accounting for 55.1%. Major sub-sectors include finance, tourism, education, and healthcare. Kuala Lumpur, the capital city, is a major financial center in the region.

Trade

Malaysia is a major trading nation, with exports amounting to $299.3 billion in 2021. The country exports a wide range of products, including electronics, petroleum, liquefied natural gas, chemicals, machinery, optical and scientific equipment, palm oil, rubber, and timber. Its main export partners are China, Singapore, the United States, Hong Kong, and Japan.

Imports totaled $238.1 billion in 2021, with key import goods including electronics, machinery, petroleum products, plastics, vehicles, iron and steel products, and chemicals. Major import partners are China, Singapore, the United States, Japan, and Taiwan.

Foreign Direct Investment

Malaysia has attracted significant foreign direct investment (FDI), with a total of $162.1 billion in 2021. The country offers a favorable investment climate, with incentives for foreign investors in various sectors, including manufacturing, services, and high technology.

Challenges

Despite its economic success, Malaysia faces several challenges, including income inequality, reliance on exports, and the need for economic diversification. The government has implemented various policies to address these issues, including the Shared Prosperity Vision 2030.

See also

• Economy of Southeast Asia
• New Economic Policy (Malaysia)
• Palm oil production in Malaysia
• Tourism in Malaysia
• Kuala Lumpur