2018 GDP growth projected at 5% to 5.5%
FocusM team 27 Oct 2017 15:21
The Consumer Price Index is projected to rise by 3-4% in 2017 and another 2.5-3.5% in 2018

Economic Report 2017/2018 

According to the Economic Report 2017/18 from the Ministry of Finance, Malaysia’s Gross Domestic Product (GDP) is projected to grow by 5.2-5.7% in 2017. However, the government is expecting the growth to moderate to a lower range of 5% to 5.5% in 2018. In 2016, the GDP grew by 4.2%.

The lower projected growth in 2018 is due to lower growth in all sectors, except for mining and quarry. Mining and quarrying, and petroleum-related activities are projected to accelerate further from 2017’s estimate of 0.5% to 0.9% in 2018. The agriculture sector is projected to drop the most from a projected 5.6% growth in 2017 to 2.4% in 2018.

 Trade surplus to widen further in 2018

The trade surplus for 2017 is estimated at RM94.6 bil. This is expected to increase to RM97 bil in 2018. Exports in 2018 are projected to increase by 3.4% to RM948.7 bil while imports are estimated at RM851.7 bil, representing a 3.5% rise from 2017’s projection of RM822.9 bil.

Exports of manufactured goods, accounting for 81% of the total export value, is expected to increase by 3.1% to RM769.4 bil.

Intermediate goods account for 59% of the country’s total imports. In 2018, the import of such goods is expected to grow by 3.6% to RM499 bil. All in all, the country’s total trade is projected to rise from RM1.74 tril in 2017 to RM1.8 tril in 2018.


Federal govt’s 2018 revenue estimated at RM280 bil

The government is estimating its 2018 revenue, including borrowings, at RM280.3 bil. Borrowings and use of government assets will account for 14% of the government’s revenue in 2018. Of this, 42% will be derived from income tax followed by another 22% from indirect taxes. Non-tax revenue will fuel another 17% of the government’s revenue.

The government plans to spend 8.8% of its revenue in 2018 (2017: 8.3%) on retirement related charges, equivalent to RM24.6 bil in contrast to 2017’s RM21.6 bil. Retirement charges are projected to increase by 14% in 2018.

About 28% of the revenue has been budgeted for emoluments with another 11% for debt service charges. Grants to state governments remain low at only 3% of the total expected expenditure. Another 12% will go towards supplies and services.

 Per capita income to rise by 5.1%

Malaysia’s per capita income is expected to increase by 7.7% to RM40,713 in 2017. It has been projected to rise by another 5% to RM42,777 in 2018. In 2016, the per capita income was RM37,791. 

“Per capita income” basically measures the average salary earned per person in a specified year. The computation is done by dividing Malaysia’s total income by the total population. From the estimated 32.1 million in 2017, Malaysia’s population has been projected to touch 32.9 million in 2018.


2018 CPI to range between 2.5% and 3.5%

Having risen by 2.1% in 2016, the Consumer Price Index (CPI) has been projected to increase by a further 3-4% in 2017 and another 2.5-3.5% in 2018. The CPI primarily measures changes in the various price levels of basic consumer goods and services.

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