Malaysia's GDP needs to grow 2.1 per cent yearly to be top 30 globally

29 Jul 2023 04:26pm
Malaysia is setting its sights on becoming among the world’s top 30 largest economies in less than 10 years - up from its 37th ranking in 2022.
Anwar Ibrahim (left). Bernama photo
Malaysia is setting its sights on becoming among the world’s top 30 largest economies in less than 10 years - up from its 37th ranking in 2022. Anwar Ibrahim (left). Bernama photo

SHAH ALAM – Malaysian bosses say feedback from the International Institute for Management Development (IMD) indicates the need to address business laws, education and social framework if the country hopes to be the top 30 economically performing countries within a decade.

Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman said these initiatives would lead to strenghtening Malaysia's global business standing.

Businesses, he said face a challenging environment due to rapidly evolving customer preferences, globalisation, stiff competition and human resources challenges, including attracting and retaining talent.

"Only about 40 per cent of MSMEs are successfully overcoming these

challenges to remain sustainable," he told Sinar Daily.

Despite these limitations, businesses have manage to enhance the labour market throughout 2022 and the early part of 2023.

Employment figures have shown a positive trend with more individuals now employed, contributing to a decline in the unemployment rate. The rate has dropped to 3.5 per cent in the first quarter of 2023, compared to 3.6 per cent in the fourth quarter of 2022.

"The number of unemployed people has dropped to 586,900 in the first quarter of 2023 as comapred to 600,500 people in Q4 2022," he said.

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Based on the International Labour Organisation (ILO) classification, unemployment rate of 4 per cent and below indicates full employment, indicating improvements to livelihoods.

On Thursday, Prime Minister Datuk Seri Anwar Ibrahim said Malaysia has set a target to elevate its economy to be among the world's top 30 largest economies within the next decade.

The main focus is on economic restructuring towards making Malaysia an economic leader in Asia,

Syed Hussain further said MSMEs constitute about 98 per cent of registered businesses in the country, contributing 38.9 per cent to overall gross domestic product (GDP) and providing 48.4 per cent to total employment and accounting for 17.9 per cent to total exports.

He urged Malaysian businesses to expand their growth globally to hit the nation's target of becoming the 30th largest economy in the world. At present Malaysia is ranked as the fifth largest in Southeast Asia and the 38th globally in terms of GDP.

The current GDP is at US$406.3 billion and to be at 30th largest, the GDP needs to increse by 21 per cent within the next 10 years," he said.

"The GDP needs to increase by 2.1 per cent per year over the next 10 years which is well within Malaysia’s reach provided that there is no external shocks like the recent Covid 19 Pandemic.

Business Synergy business development manager Nuraini Sedek said that 90 per cent of business face challenges in expanding due to lack of working capital.

She said Malaysian businesses ned to develop a clearer financial strategy and secure realible back up plans without solely relying on government and financial institutions.