Economic Update (Malaysia) - 14/05/2014

ETP Report Card - Third Year Into Action, Malaysia On Track To Achieve A High Income Nation

¨        The Prime Minister unveiled on 12 May the annual report cards on the Economic Transformation Programme (ETP), which achieved a commendable set of Key Performance Indicators (KPIs). The overall achievement rate for its combined 12 National Key Economic Areas (NKEAs) is 102% in 2013. The achievement rate, however, was lower than that of 118% recorded in 2012 and 123% in 2011, as four NKEAs failed to meet its KPIs. This suggests that the ETP was facing greater challenge as it progressed into the third year and will likely be so moving forward after the low-hanging fruit has been plugged.

¨        The continued momentum in private sector investment and job creation in 2013 helped to bring up the nation’s income in the last four years. The GNI per capita managed to grow by 0.9%, bringing the level to USD10,060 in 2013, after rising by 2.8% to USD9,970 in 2012, despite challenging external environment.

¨        With 196 projects and MYR219.3bn worth of investment commitments so far, the ETP acts as an important catalyst for private investment and economic growth. This is projected to contribute MYR143.5bn to GNI and create 437,816 new jobs.

¨        As the ETP is reaching a maturity stage and with much of the low-hanging fruits has been tapped, more effort is needed if the country aims to remain on its trajectory to achieve a high income nation status by 2020.

¨        The tourism NKEA may see some pull-back in its target for 2014 due to the bad publicity from MH370 tragedy. While the Government continues stepping up its efforts to boost tourist arrivals and receipts, especially in shopping, the fallout from MH370 will likely put a damper on Visit Malaysia Year 2014.

¨        We are also concerned that large-scale investment in property, though helping to boost the economy in the short term, could also lead to a property glut in the country, if demand fails to pick up to meet the large increase in supply.

Link to the report: Economic Update - ETP Report Card - Third Year Into Action, Malaysia On Track To Achieve A High Income Nation

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