The government remains committed to ensuring that economic growth translates into higher productivity, better-quality jobs and rising incomes for the people, the minister said at the launch of the OECD Economic Survey of Malaysia report released by the Organisation for Economic Co-operation and Development (OECD) on Tuesday.
Malaysia’s gross national income (GNI) per capita reached RM57,200 (US$13,351) last year while the World Bank’s high-income benchmark was $14,375. The country has maintained its 2026 economic growth target of 4-5%.
According to the OECD report, Malaysia is projected to attain high-income status between 2028 and 2030. Its gross domestic product (GDP) is forecast to expand by 4.9% this year and 5% in 2027.
Inflation is projected to rise to 2.1% in 2026 and 2.3% next year, driven by higher wages and energy prices, while unemployment is expected to decline further to a healthy 2.9% in 2026.
The fiscal deficit is forecast to narrow gradually from 4.3% of GDP last year to 4% in 2026 and 3.8% in 2027.
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People walk and take pictures along the Saloma Link Bridge in Kuala Lumpur, Malaysia, on Dec. 19, 2020. Photo by AFP |
To sustain long-term growth, avoid the middle-income trap and address population aging, the OECD urged Malaysia to press ahead with structural reforms.
It recommended reintroducing the Goods and Services Tax, gradually replacing broad fuel subsidies with targeted cash transfers and prioritizing academic merit in public university admissions while expanding investment in free early childhood education.
The report also called for better management of the rapid expansion of data centers, warning that they generate relatively few jobs while placing growing pressure on electricity and water supplies, underscoring the need to accelerate renewable energy development.
It also recommended improving transparency and governance in government-linked companies by limiting politically motivated board appointments and adopting its guidelines on corporate governance of state-owned enterprises to enhance productivity and accountability.
Akmal Nasrullah said the OECD report would serve as an important reference for implementing Malaysia’s 13th Five-Year Plan (2026-2030) and accelerating the country’s structural economic reforms.