The Malaysian economy is a newly industrialized market economy and it is the fourth largest in Southeast Asia ranking the 35th largest in the world. Malaysia is the third richest economy in Southeast Asia by the value of GDP per capita. The economy of the country is highly diversified and robust with the export value of products that were of high tech which accounted for $63.3 billion in 2014 which was second highest behind Singapore. Malaysia is also the world's second largest exporting country of palm oil products after Indonesia.
Overview Of The Economy Of Malaysia
Malaysia had a GDP by PPP of $815.6 billion and a nominal GDP of 296.2 billion in 2015. The country recorded a GDP growth rate of 5.0% in 2015. In 2015 Malaysia's PPP GDP per capita was estimated at $26,300.20 while the nominal GDP per capita stood at $9,776.206. In 2014 the service sector contributed 56.2% while the industry and agriculture sectors contributed 36.8% and 7.1% respectively. In 2015 Malaysia experienced an inflation rate of 3.0% while 1% of its population was living below the poverty line. The country's unemployment rate in 2014 was 3.1%, and it ranked 18th in regards to ease of doing business. The labor force of Malaysia was estimated at 14.4 million in 2014 and 2012 it was distributed in the various sectors as follows: services 53.5%, industry 36%, and agriculture 11.1%. The country's foreign investments were valued at US$94.5 billion in 2015 while the state's revenues and expenses were valued at $65.72 billion and $79.4 billion respectively in 2013.
Leading Industries Of Malaysia
The service sector of Malaysia is dominated by financial services, tourism, and medical technology. The primary products dominating the Malaysian agricultural industry are palm oil, rubber, paddy, and coconut. The major industries in the country are the electronics industry, construction, and automotive industries.
Top Exports And Export Partners Of Malaysia
Malaysia is ranked 26th largest export economy in the world. The leading export goods are electrical and electronic products, liquefied natural gas, palm oil, petroleum, chemicals, machinery, optical and scientific equipment, manufactures of metal, rubber, wood and wood products. The top export partners are Singapore taking 13.6%, China 12.6%, Japan 11.8%, United States 8.7%, Thailand 5.4%, Hong Kong 4.3% India 4.2%, and Australia taking 4.1% of the total exports of Malaysia in 2012.
Top Imports And Import Partners Of Malaysia
Malaysia is the world's 26th largest importing economy. The country's top imports are electrical and electrical products, machinery, chemicals, petroleum, plastics, vehicles, metal, iron, and steel products. Malaysia's top import partners are China accounting for 15.1%, Singapore with 13.3%, Japan with 10.3%, the United States with 8.1%, Thailand with 6.0%, Indonesia with 5.1%, and South Korea accounting for 4.1% of the total imports of Malaysia in 2012.
Challenges To Malaysia's Economy
The Malaysian government has been coming up with policies with the aim of increasing the income per capita to the full development of a high-income country by the year 2020, but it has been faced with some challenges. Some of the challenges to the economy of Malaysia include slow growth in labor productivity and low wages which are considered to be lagging behind according to the OECD standards. The IMF and World Bank have frequently suggested the need for indigenous innovations and structural reforms to help move Malaysia up and grant the country an opportunity to break out from the middle-income trap. Heavy reliance on oil exports has also affected the growth of Malaysia's economy especially during the collapse of oil price in 2015.