KUALA LUMPUR: Malaysia’s target to achieve high-income status is realistic, given its solid growth trajectory, economic stability and strong investor confidence. Its economic growth will continue to be driven by contributions from key states such as Selangor, Sarawak, Kuala Lumpur and Penang over the next 3 to 6 years, said Juwai IQI Global Chief Economist Shan Saeed.
“Selangor currently contributes 25% to the nation’s gross domestic product (GDP), Sarawak is set to rise strongly and become a major contributor to the economy while Penang remains as the manufacturing hub,” he said.
Overall, he expects Malaysia’s GDP growth to be around 4%-5% in the next 3 to 5 years, supported by a stronger ringgit, as the local note is expected to range between RM4.10 and RM4.40 versus the US dollar.
“The budget deficit target remains under 3.5% with disciplined fiscal policy,” said Shan.
He opined that growth in information and communication technologies (ICT), oil and gas (O&G), real estate, electrical and electronics (E&E), e-commerce, and logistics sectors will support Malaysia’s bid for high-income status.
Malaysia is already a significant player in the E&E market, exporting to countries like China, the United States, Singapore, Hong Kong, and Japan.
At the same time, the O&G sector continues to be crucial to the nation’s economy, with a strong ecosystem supporting both domestic and regional value chains.
Recently, World Bank Malaysia lead economist, Apurva Sanghi said five Malaysian states, namely Selangor, Sarawak, Penang, Labuan and Kuala Lumpur, have surpassed the 2023 high-income threshold of US$14,005.
According to his posting on X, Kuala Lumpur has the highest US$29,967 gross national income (GNI) per capita, followed by Labuan (US$19,17), Penang (US$16,660), Sarawak (US$16,650) and Selangor (US$14,29).
Meanwhile, states with the lowest GNI per capita are Kelantan (US$3,850), Perlis (US$5,490) and Kedah (US$6,027).
He noted that Malaysia could reach high-income status by 2030, emphasising the need for faster reforms to speed up the transition.
Economy Minister Rafizi Ramli recently said Malaysia could attain high-income nation status from 2027 if the national economy grows 4%-5% every year and the ringgit strengthens to around RM4.20 against the US dollar.
— BERNAMA
