The economy has been recovering from the deep contraction in early 2011. Real GDP growth rose in seasonally adjusted terms in each of the last three quarters, limiting the full year decline in real GDP to 1.7 percent. Fixed investment, inventory restocking and, of late, exports, have been the main drivers of the recovery. At the sectorial level, manufacturing, which led the downturn, is making a strong contribution to growth. Although capacity utilization rates continue to rise, there remains considerable spare capacity. The official unemployment rate in average is 3.5 percent. The number of retrenchments has continued to fall, however, reaching pre-crisis levels. The continued pickup in manufacturing suggests that unemployment is trending lower, but it take longer for pre-crisis levels to return. Exports are recovering thanks to improved external demand and higher international commodity prices. Exports rose 37 percent year-on-year in January, with electrical and electronic products up 56 percent. Stronger demand from emerging East Asian economies has been particularly important, making the largest contribution to Malaysia’s export growth. Reflecting the integrated supply chains of much of the export-oriented manufacturing sector, imports used for processing – intermediate goods – have been rising in line with exports

 

Foreign investors have also returned. After the sharp rise in portfolio outflows in late 2008, in the heat of the global financial crisis, outflows shifted to sizeable inflows in the third and fourth quarters of 2011. Direct investment abroad also broadly returned to its previous trend. Overall, the current account surplus remained an oversized at 16.7 percent of GDP in 2011. The financial sector remains strong. Non-performing loans amount to 1.9 percent of the total, but there may be lags in the realization of any losses from the downturn. Capital adequacy ratio remains little changed at about 14.6 percent. Moreover, bank profitability appeared to start improving in the third quarter of 2011 after a long decline since early 2008. Bank lending is still largely concentrated on households, which remain in good financial health with moderate indebtedness. Lending activity is picking up, with credits to companies rising 20 percent year-on-year in the fourth quarter. .

 

Preliminary data indicates that the federal government deficit rose to about 7 percent of GDP in 2011 from 4.8 percent in 2010. The increase was due to lower revenues in line with the weaker activity and the stimulus spending. The Malaysian economy is expected to grow robustly by 6 percent in 2012, building on faster-than-expected growth in the fourth quarter of last year. The recovery will be driven largely by strong consumer spending and continued restocking. The contributions of net external demand will likely turn negative, as imports outpace exports given the stronger domestic demand. Unwinding of policy support through fiscal consolidation effort and further rate hikes are not expected to derail the recovery, as withdrawal of stimulus will be gradual. The growth outlook remains favorable for 2012 and 2013 with anticipated growth rates of 5.3 to 5.6 percent. The main near-term risk to the outlook is external and arises from the strength of the global recovery. The fundamental medium-term risk arises from the structural reform momentum under the New Economic Model (NEM). The NEM is expected to revitalize growth by promoting private sector investment, liberalizing and deregulating the economy and modernizing the country’s social protection mechanisms. Provided reform momentum picks up as under the NEM, Malaysia’s competitiveness should be enhanced as will growth prospects. .

Source: world bank, country profile.


General Information
Official Name Federation of Malaysia
Capital Kuala Lumpur
Main Cities Kuala Lumpur, Subang Jaya, Klang, Johor Baru, Ampang Jaya
Languages Malay(official), Chinese, English, Tamil, Iban, Banjar
Government Federated constitutional monarchy
Independence Day From UK (31 August 1957)
Area 330,252 sq km
Population 30 million (April 2013 est.)
Currency Ringgit
Source: National sources, 2013
Economic Information
  2005 2006 2007 2008 2009 2010 2011 2012
GDP  
Nominal GDP (US$bn) 138.0 156.6 186.1 221.6 191.3 221.1 282 310
Real GDP Growth (%) 5.3 5.8 6.2 4.8 -1.7 5.4 3.2 5.56
Expenditure on GDP (% real change)
Private Consumption 9.1 6.8 10.4 8.5 0.8 4.9 7.0 6.1
Government Consumption 6.5 5.0 6.5 10.9 3.7 3.1 17.2 0.8
Gross fixed Investment 5.0 7.5 9.6 0.8 -5.5 3.9 6.9 14
Export of goods & Services 8.3 6.6 4.5 1.3 -10.1 8.0 3.8 2.7
Import of goods & Services 8.9 8.1 6.0 1.9 -12.5 12.1 5.7 4.6
Origin of GDP (%real change)
Agriculture 2.6 5.2 1.4 4.0 0.4 2.3 3.5 3
Industry 3.5 4.5 3.0 0.8 -7.0 5.0 5.4 5.2
Services 7.3 7.5 9.7 7.3 2.6 5.4 6.5 6.3
GDP per capita(US$ at PPP) 11,531 12,362 13,238 13,862 13,514 14,173 14,517 14,871
Fiscal Indicator (% of GDP)
Public-sector expenditure -3.6 -3.3 -3.2 -4.8 -7.0 -5.6 -4.5 -5.1
Public-sector debt interest payment 2.2 2.2 2.0 1.7 2.1 2.2 2.2 2.3
Public-sector primary balance -1.4 -1.2 -1.2 -3.1 -4.9 -3.3 -3.5 -3.4
Net public debt 43.8 42.5 41.7 41.5 51.4 51.6 51.8 51.9
Prices and financial indicators
Exchange Rates M$:US$ (end-period) 3.78 3.53 3.31 3.46 3.42 3.30 3.25 3.30
Consumer Prices (end-period; % change) 3.3 3.1 2.4 4.4 1.1 2.3 3.5 3
Stock of money M1(%change) 8.7 12.2 18.7 9.0 9.3 10.3 10.5 10.6
Stock of money M2(%change) 6.3 11.5 10.5 11.3 8.9 10.0 10.7 10.5
Lending interest rate(av.;%) 6.1 6.6 6.3 5.9 4.8 5.1 5.2 5.2
Current Account(US$m)
Trade Balance 33,156 37,441 37,190 51,261 38,291 34,067 39,421 31,234
Goods: exports fob 141,808 160,916 176,433 199,733 157,632 198,800 227,544 228,847
Goods: imports cif -108,653 -123,474 -139,243 -148,472 -119,339 -164,733 -188,123 -197,613
Services Balance -2,380 -1,970 690 51 382 1,325 -2,791 -3,289
Income Balance -6,318 -4,712 -4,055 -7,137 -3,229 -4,511 -7,303 -8,603
Current-account Balance 19,980 26,200 29,243 38,914 30,907 28,041 32,443 30,015
External Debt (US$m)
Debt Stock 51,981 56,491 53,717 54,597 48,559 49,926 50,017 54,107
Debt service paid 9,389 7,630 10,006 8,786 9,978 9,676 9,715 10,017
Principal repayments 7,192 5,269 7,818 7,026 8,343 7,868 8,016 8,181
Interest 2,197 2,362 2,189 1,760 1,635 1,808 1,811 1,902
International reserves(US$m)
Total international reserves 69,917 82,194 101,082 91,212 95,496 105,205 108,318 110,712
Source: IMF, International Financial Statistics 2013
Malaysia Trade with World
US$ Mn. 2006 2007 2008 2009 2010 2011 2012
Export (fob) 160,659 176,213 199,510 164,721 198,800 227,544 228,847
Import (cif) 130,487 146,992 156,932 133,243 164,733 188,123 197,613
Trade Volume 291,146 323,205 356,442 297,964 363,533 415,667 426,460
Trade Balance 30,172 29,221 42,578 31,478 34,067 39,421 31,234
World Trade (US$ Bn) 24,294 27,845 32,215 24,948 28,143 35,397 36,355
Share 1.20% 1.16% 1.106% 1.19% 1.3% 1.17% 1.17%
Source: IMF, International Financial Statistics 2013
Malaysia Trade with D-8 Countries
US$ Mn. 2006 2007 2008 2009 2010 2011 2012
Export (fob) 6,825.21 8,935.08 11,071.83 10,026.8 13,301 15,231 15,419
Import (cif) 5,747.99 6,980.95 8,504.77 5,808.12 11,312 12,776 11,479
Trade Volume 12,573.2 15,916.03 19,576.6 15,834.92 24,613 28,007 26,898
Trade Balance 1,077.22 1,954.13 2,567.06 4,218.68 1,989 2,455 3,940
D-8 Intra Trade (US$ Mn) 49,806.52 66,828.03 78,382.2 66,947.63 101,139 129,493 148,191
Share 25.24% 23.81% 24.97% 23.80% 24.33% 21.6% 18.15%
Source: IMF, International Financial Statistics 2013
Malaysia Trade By 10 Main Commodities
Export by 10 Principal Commodities, (million US$)
No. Commodity 2006 2007 2008 2009 2010 2011 2012
1. Electrical, electronic equipment 49,987.5 51,586.5 50,883.8 45,187.3 55,775 61,350 59,297
2. Mineral fuels, oils, distillation products, etc 22,064.1 25,332.1 36,299.5 23,251.2 31,513.5 40,277 46,240
3. Machinery, nuclear reactors, boilers, etc 32,682.6 32,820.8 33,076.8 26,229.7 29,927.3 25,234 24,837
4. Animal, vegetable fats and oils, cleavage products, etc 6,971.7 10,796.7 16,488.3 11,979.9 16,201.6 22,719 19,504
5. Rubber and articles thereof 4,826.6 5,231.2 6,280.6 4,824.3 7,862.2 10,289 9,082
6. Plastics and articles thereof 4,474.9 5,173.8 6,280.6 4,824.3 7,862.2 7,007 6,884
7. Optical, photo, technical, medical, etc apparatus 3,993.7 4,112.9 4,457.9 3,625.1 5,560.1 5,998 7,455
8. Wood and articles of wood, wood charcoal 4,656.2 4,695.4 4,733.8 3,766.8 4,318.5 4,489 4,372
9. Organic chemicals 2,551.7 3,162.0 3,375.4 2,491.1 3,731.3 4,552 4,505
10. Miscellaneous chemical products 2,031.6 2,595.9 2,988.9 2,195.0 3,077.9 3,919 3,560
Import by 10 Principal commodities, (million US$)
No. Commodity 2006 2007 2008 2009 2010 2011 2012
1. Electrical, electronic equipment 47,793.3 49,790.8 48,288.1 37,387.5 51,234.0 50,712 50,214
2. Machinery, nuclear reactors, boilers, etc 19,285.3 21,799.4 21,561.2 18,812.9 21,293.1 22,733 23,410
3. Mineral fuels, oils, distillation products, etc 11,745.5 12,883.7 17,013.3 10,147.8 16,403.5 22,055 27,856
4. Vehicles other than railway, tramway 3,124.3 3,217.7 4,031.7 3,843.9 5,716.6 5,872 7,309
5. Iron and Steel 4,212.4 5,697.6 6,531.5 3,648.9 5,420.1 6,296 6,063
6. Plastics and articles thereof 4,668.1 4,636.1 4,801.9 3,786.5 5,174.7 6,056 5,967
7. Optical, photo, technical, medical, etc apparatus 3,866.8 3,771.5 4,464.8 3,620.9 4,794.6 5,354 5,500
8. Pearls, precious stones, metals, coins, etc 1,930.8 2,562.1 3,288.1 2,596.3 3,686.9 4,978 5,059
9. Organic chemicals 2,387.5 2,935.8 2,935.1 2,464.9 3,394.4 3,964 3,829
10. Rubber and articles thereof 1,293.6 1,681.8 2,128.7 2,200.9 3,160.2 4,021 4,569
Source: WTO, International Trade Centre 2013
Export and Import by Main Destination Country
Export by Main Destination Country (% of total)
2005 2006 2007 2008 2009 2010 2011 2012
Singapore 15.6 15.4 14.6 14.7 14 13.4 12.7 13.6
China 6.6 7.2 8.8 9.5 12.2 12.6 13.1 12.6
USA 19.6 18.8 15.6 12.5 11 9.5 8.3 8.7
Japan 9.4 8.9 9.1 10.8 9.8 10.4 11.5 11.8
Thailand 5.4 5.3 5 4.8 5.4 5.3 5.1 5.4
Hongkong 5.8 4.9 4.6 4.3 5.2 5.1 4.5 4.3
Other 37.6 39.5 42.3 43.4 42.4 43.7 44.8 43.6
Source: WTO, International Trade Centre 2013
Import by Main Destination Country (% of total)
2005 2006 2007 2008 2009 2010 2011 2012
China 11.5 12.1 12.9 12.8 14 12.6 13.2 15.1
USA 12.9 12.5 10.8 10.8 11.2 10.7 9.7 8.1
Singapore 11.7 11.7 11.5 10.9 11 11.4 12.8 13.2
Thailand 5.3 5 5.4 5.6 6.1 6.2 6.0 6.0
Indonesia 3.8 3.8 4.2 4.6 5.3 5.6 6.1 5.1
Other 40.3 51.2 42.2 42.8 39.9 40.9 40.8 42.2
Source: WTO, International Trade Centre 2013
Foreign Direct Investment (Overview, selected years)
US$(Mn.) FDI Flows FDI Stocks
2005 2006 2007 2008 2009 2010 2011 2012 2005 2006 2007 2008 2009 2010 2011 2012
Inward 4,064 6,060 8,594 7,171 1,452 9,102 11,966 10,074 28,731 52,747 76,612 73,262 78,994 101,620 115,064 132,400
Outward 3,075 6,021 11,313 14,964 7,784 13,328 15,257 17,115 22,035 36,127 58,435 66,926 79,662 96,964 106,448 120,396
Source: UNCTAD, 2013
Agriculture: Food Commodities
US$ Mn 2008 2009 2010 2011 2012
Export 17,951.4 13,267.8 17,791.7 19,245 19,518
Import 5,824 5,258 6,942 7,539 8,034
Trade Volume 23,775.4 18,925.8 24,733.7 26,784 27,554
Trade Balance -12,127.4 8,009.8 10,849.7 11,706 11,484
Malaysia's Total Trade 337,610.3 297,964 363,533 415,667 426,460
Share to Malaysia's Total Trade 7.04% 6.35% 6.8% 6.4% 6.46%
Source: WTO,FAO 2013
Energy
Oil
Petroleum(Thousand Barrels per Day) 2006 2007 2008 2009 2010 2011 2012
Total Oil Production 717 743 754 739 716 720 725
Consumption 459 481 475 538 556 560 560
Refinery - - - - - - -
Proved Reserved(Billion barrels) 5.4 5.5 5.5 5.8 5.8 5.8 5.8
Natural Gas
Natural Gas(Billion Cubic Feet/Day) 2006 2007 2008 2009 2010 2011 2012
Total Production 5.8 5.9 6.0 6.2 6.4 6.6 6.7
Consumption 2.8 2.8 3.0 3.3 3.5 3.5 3.5
Proved Reserved(Trillion cubic meters,TCM) 2.4 2.4 2.4 2.4 2.4 2.4 2.4
Others Energy
Energy Year
2008 2009 2010 2011 2012
Biofuels production (Thousand barrels daily) 5 6 2 4 5
Electricity Generation (Terawatt-hours) 106.4 106.9 116.2 120.1 123
Renewable Energy (Installed Capacity) Geothermal (mega-watts) - - - - -
Solar (maga-watts) 8.8 11.1 14.6 15.7 16.1
Wind (mega-watts) - - - - -
Source: BP statistics, 2013