Overview - MPC

MESSAGE FROM THE MINISTER OF
INTERNATIONAL TRADE AND INDUSTRY
MALAYSIA
The government is committed to elevate the economy from high middle income to that of
high income economy. Towards this endeavour, the government has introduced the new
economic model that is based on innovation, creativity and high-value added activities to
increase productivity level of the country and hasten the transformation of the economy.
Against the backdrop of a challenging external sector, Malaysia’s economy recovered
strongly in the fourth quarter 2009 with a productivity growth of 2.3% and thus supporting
the GDP growth of 4.5%. The expansion of productivity in the quarter was driven by
strong growth of productivity in the manufacturing and services sectors which expanded
by 4.6% and 3.1% respectively. This development had made it possible for the economy
to register smaller declines in productivity and GDP at 1.8% and 1.7% respectively in
2009. Among our neighbouring economies, Singapore’s productivity declined by 4.1%,
Thailand 3.7% and Taiwan 2.0%. However, China, India and Indonesia recorded strong
expansion at 8.4%, 4.8% and 2.5% respectively. Among the developed economies, the
USA and Korea recorded productivity growth at 1.1% and 0.6%, while Japan, Germany
and the United Kingdom productivity declined by 3.6%, 4.8% and 2.7% respectively.
Enhancing efficiency of all factors of production is pertinent in propelling the economy
into a new growth trajectory. The government places great emphasis on enhancing the
contribution of Total Factor Productivity (TFP) to economic growth. During the period
2000-2009, the economy posted a TFP growth of 1.5%, supporting the GDP growth of
4.7%. The growth in TFP was augmented by intensification of demand, investment of
human capital, capital restructuring and improvement in technical progress.