Malaysia On Track For High-income Status
02 Aug 2024
Malaysia’s target to achieve high-income status is realistic, given its solid growth trajectory, economic stability and strong investor confidence.
Its economic growth will continue to be driven by contributions from key states such as Selangor, Sarawak, Kuala Lumpur, and Penang over the next three to six years, said Juwai IQI global chief economist Shan Saeed.
“Selangor currently contributes 25 per cent to the nation’s gross domestic product (GDP), Sarawak is set to rise strongly and become a major contributor to the economy, while Penang remains as the manufacturing hub,” he told Bernama.
Overall, he expects Malaysia’s GDP growth to be around 4.0-5.0 per cent in the next three to five years, supported by a stronger ringgit, as the local note is expected to range between RM4.10 and RM4.40
versus the US dollar.
“The budget deficit target remains under 3.5 per cent with disciplined fiscal policy,” said Shan.
He opined that growth in information and communication technologies (ICT), oil and gas (O&G), real estate, electrical and electronics (E&E), e-commerce, and logistics sectors will support Malaysia’s bid for high-income status.
Malaysia is already a significant player in the E&E market, exporting to countries like China, the United States, Singapore, Hong Kong, and Japan.
At the same time, the O&G sector continues to be crucial to the nation’s economy, with a strong ecosystem supporting both domestic and regional value chains.
Under the New Industrial Master Plan 2030 (NIMP 2030), the country aims to transform into a high-technology nation by 2030,positioning itself as a dynamic ICT hub in Southeast Asia.
Recently, World Bank Malaysia lead economist, Apurva Sanghi said five Malaysian states, namely Selangor, Sarawak, Penang, Labuan and Kuala Lumpur, have surpassed the 2023 high-income threshold of US$14,005 (US$1=RM4.56).
According to his posting on X, Kuala Lumpur has the highest at US$29,967 gross national income (GNI) per capita, followed by Labuan (US$19,117), Penang (US$16,660), Sarawak (US$16,650) and Selangor (US$14,291).
Meanwhile, states with the lowest GNI per capita are Kelantan (US$3,850), Perlis (US$5,490) and Kedah (US$6,027).
He noted that Malaysia could reach high-income status by 2030, emphasising the need for faster reforms to speed up the transition.
Economy Minister Rafizi Ramli recently said Malaysia could attain high-income nation status from 2027 if the national economy grows 4.0-5.0 per cent every year and the ringgit strengthens to around RM4.20 against the US dollar.
Source: Bernama
