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Malaysia: Zafrul laments lower trade, investment share in GDP
PETALING JAYA: The contribution of trade and investments to Malaysia’s gross domestic product (GDP) has declined over a 10-year period, laments Tengku Datuk Seri Zafrul Abdul Aziz.
Speaking during the Invest Malaysia 2023 event, the International Trade and Industry Minister highlighted the pressing need for Malaysia to reinvigorate its trade and investments as neighbouring countries are catching up fast.
“Trade and investments used to be 38% of our GDP and that was in 2011. But in 2021, it has fallen to 27%.
“This means that consumption and government spending were driving GDP growth. So, there is a need to focus on trade and investments to make the GDP growth sustainable,” he said yesterday.
In order to reverse the trend, Tengku Zafrul said the country should enhance national productivity and improve ease of doing business, among others.
“It needs a whole-of-nation approach and there should be better coordination among different ministries and state governments,” he added.
Tengku Zafrul also pointed out that Malaysia’s productivity growth has been slowing down compared to other countries in Asean, albeit the fact that the country’s productivity is still one of the highest in the region in absolute terms.
“The gap is narrowing. If you look at the compound annual growth rate of Malaysia’s productivity for the last 10 year, it is only 1.4% versus Singapore’s 2.5%, Thailand’s 2.5%, Vietnam’s 5% and the Philippines’ 3.5%,” he said.
The minister opined that a stronger productivity growth should translate to higher income levels for Malaysians. That said, Tengku Zafrul described the current income levels in the country as “very low”.
“The income level in Malaysia has not risen as fast as it should be. This is worrying as the gap is also increasing and we need to ensure that the government plays a role to balance this situation,” he said.
Commenting on the country’s investment prospects, Tengku Zafrul said the government has set a high growth target for this year.
“In 2023, we are targeting a 20% growth in approved investments compared to what we have achieved in 2022,” according to him.
In 2022, the country recorded approved investments totalling RM264.6bil (US$60bil), which translates to 4,454 projects and 140,370 job opportunities to be created.
“It is a tall order (to achieve 20% growth), given the challenges expected this year.
“Moving forward, what’s important is that we get our act together to ensure that we can achieve the very aggressive 20% target of higher approved investments for 2023,” he said.
Source: https://www.thestar.com.my/business/business-news/2023/03/09/zafrul-laments-lower-trade-investment-share-in-gdp