Malaysian Economic

Growth
Macroeconomics
ECO
Muhammad Nashriq Bin Othman
Muhammad Nashriq Bin Othman 2008297434
2008297434
411
Mohd Syazwan Bin Samsudin
Mohd Syazwan Bin Samsudin
Nor Mohd Ridwan Bin Md Said
2008296838
2008296838
2008296786
Nor Mohd Ridwan Bin Md Said 2008296786
Nor Ain Binti Kamaruzaman
Nor Ain Binti Kamaruzaman 200829
200829
Siti Nor Ashima 
Siti Nor Ashima  200829
200829
Zaidah Binti Sungap
Zaidah Binti Sungap 200829
200829
List of Contents

•Introduction
•Gross Domestic Product Definition
•Malaysian Economic Growth Before The Independence
•Malaysian Economic Growth in 1970 – 1990
•Malaysian Economic Growth in 1990 – 2000
•Malaysian Economic Growth in 2001 – 2004
•Malaysian Economic Growth in 2005 – 2008
•Conclusion
•
Introduction

•one of the most successful non­western countries to have achieved a 
relatively smooth transition to modern economic growth over the last 
century or so. 
•has a long history of internationally valued exports, being known from 
the early centuries
•The commercial importance of the area was enhanced by its strategic 
position.
•has been a center for trade for centuries.
•Malaysia is a growing and relatively open economy
•one of three countries that control the Strait of Malacca
•At one time, it was the largest producer of tin, rubber and palm oil in 
the world.
•also a member of the Developing 8 Countries.
Gross Domestic Product Definition

•the increase in value of the goods and services produced by an economy
•usually calculated in real terms
•typically refers to growth of potential output
•GDP per capita of an economy is often used as an indicator of the 
average standard of living of individuals in that country
•does not take into account positive externalities that may result 
from services such as education and health.
•
Malaysian Economic Growth Before the Independence

•the world’s largest producer of tin, rubber, and palm oil. These three 
commodities along with other raw materials firmly set Malaysia's 
economic tempo well into the mid­20th century.
•had very few secondary industries
•small size of the domestic market
•relatively small in volume and technologically undeveloped
GDP per Capita: Selected Asian Countries, 
1900­1950 
(in 1985 international dollars)

1900 1929 1950

Malaya/Malaysia 600 1,910 1,828

Singapore - - 2,276
Burma 523 651 304
Thailand 594 623 652
Indonesia 617 1,009 727
Philippines 735 1,106 943
South Korea 568 945 565
Japan 724 1,192 1,208
Malaysian Economic Growth in 1970 – 1990

•found poor productivity performance of the capital­intensive industries
•productivity performance of the heavy industries in the 1970’s and 
1980’s was not encouraging
•Petroleum and coal products have proven to be very efficient not only 
during  this period
•economy is mainly depends o agricultural sector
•Beginning in the 1980’s, the country focused on changing its economic 
structure to that of industrial­based
•
.

Asia­Pacific Region: Growth of Real GDP
(annual average percent)
1960-69 1971-80 1981-89
Japan 10.9 5.0 4.0
Asian "Tigers"

Hong Kong 10.0 9.5 7.2

South Korea 8.5 8.7 9.3
Singapore 8.9 9.0 6.9
Taiwan 11.6 9.7 8.1
ASEAN-4
Indonesia 3.5 7.9 5.2
Malaysia 6.5 8.0 5.4
Philippines 4.9 6.2 1.7
Thailand 8.3 9.9 7.1

Source: Drabble, 2000, Table 10.2; figures for Japan are for 1960­70, 1971­80, and 1981­90.
Malaysian Economic Growth in 1990 – 2000

•an important trading partner for the United States in 1999
•concentrated in the chemicals, electronics, and electrical sectors.
•Manufacturing growth began slowing down sharply from late 1995 when 
resource costs rose due to overheating and the emergence of cheaper sites
•year 1997 saw drastic changes in Malaysia
•refusing aid and thus the conditions attached thereof from the IMF
•Malaysia was not affected to the same degree in the Asian 

Financial Crisis as Indonesia, Thailand and the Philippines
•To face – massive government spending was made and Malaysia continuously 
recorded budget deficits in the years that followed
Malaysian Gross Domestic Product, 2000

Average Annual Growth in GDP, 1991 - 2000

Total 6%

Per Capita 5%

Percent of GDP earned by:

Agriculture, 2000 11%

Industry, 2000 45%

Services, 2000 44%

Sources:
Development Data Group, The World Bank. 2002. World Development Indicators 2002 online
Source : Ministry of Finance, Economic Planning Unit, Department of Statistic
Malaysian Economic Growth in 2001 – 2004

•Pak Lah plans to shift the emphasis in development to smaller, less­
costly infrastructure projects and to break the previous dominance of 
"money politics.“

•a little decrease in economic because of the 11 September incident 
where it causes the Iraqi war.

•Mining sector performance was well supported by strong growth in 
LNG
•high crude oil prices while the construction sector remains subdued 
with business focus directed at overseas projects
Gross Domestic Product
  2004
RM ( million %
)
Supply ( at constant 2000 prices )    
agriculture, forestry & fishing 34,929 4.7
mining and quarrying 42,627 4.1
manufacturing 131,127 9.8
constructions 14,903 -0.9
services 214,528 6.4
electricity, gas & water 13,100 8.1
transport, storage & communications 30,973 7.2
wholesale & retail trade, hotels & 56,441 7.1
restaurants
finance, real estate & business services 60,775 6.5
government services 28,243 5.1
other services 24,996 5.0
less : imputed bank service charges 17,705 0.2
plus : import duties 6,099 -5.5
GDP at purchases value 426 , 508 6.8

Source : Ministry of Finance, Economic Planning Unit, Department of Statistic
Malaysian Economic Growth in 2005 – 2008

•GDP Growth of 5.2% in 2005 
•Electronics sector, firm commodity prices, a strong 
private sector, and the resilience of domestic demand 
to higher oil prices
•Inflationary pressures are likely to persist, prompting further 
increases in interest rates in 2006
•weaker global demand for electrical and electronic products hurt 
exports
•In contrast, exports of agricultural products surged, led by palm oil
•this commodity climbed on strong global demand, 
reinforced by a rise in soybean oil prices as some US 
producers switched to planting corn for biofuel
 Gross Domestic Product 2007

Supply ( at constant 2000 prices ) RM %

( million )
agriculture, forestry & fishing 38,594 2.2
mining and quarrying 42,663 3.3
manufacturing 152,262 3.1
constructions 15,279 4.6
services 270,762 9.7
electricity, gas & water 15,196 3.9
transport, storage & communications 37,851 8.4
wholesale & retail trade, hotels & 73,522 12.2
restaurants
finance, real estate & business services 80,516 13.4
government services 35,004 4.5
other services 28,673 5
less : imputed bank service charges 19,727 7.5
plus : import duties 5,521 4.4
GDP at purchases value 505 , 353 6.3

Source : Ministry of Finance, Economic Planning Unit, Department of Statistic
Conclusion
Gross Domestic Product : Selected Country
Period Malaysia United United Japan Singapor Indonesi
States Kingdom e a
1990 - 1995 7.3 2.3 1.5 2.1 9.1 7.2

1996 - 2000 4.6 4.1 3.2 1.1 6.4 1.0

2001 - 2005 6.1 2.4 2.4 1.3 9.8 4.8

2006 - 2008 5.9 2.2 2.9 2.2 5.7 6.0

Source : Bank Negara Malaysia

•always been exceptionally open to external influences such as 
globalization
•economy has benefited from extensive restructuring with sustained 
growth of exports from both the primary and secondary sectors
•1997 – Asian economic crisis
•George Soros
•2001 – WTC – Iraqi war
•Malaysian economy most affected by American economic.
 Thank
You !!
Questions…?