SINGAPORE: Malaysia is on track to becoming a high-income nation by the end of the decade, according to the Asean+3 Macroeconomic Research Office (Amro).
Chief economist Hoe Ee Khor said the country is backed by a strong inflow of foreign direct investments (FDIs) and a robust manufacturing sector, especially in the semiconductor industry.
“If you look at the FDI inflows into Malaysia in the last few years, there was a spike in 2021 and 2022 and that should begin to show up in terms of actual investment in the next few years.
“We are optimistic that as long as they maintain the fiscal and monetary discipline, the new inflows of investment from abroad will be able to help raise the growth rate and reach the high-income level,” he told a virtual media briefing on the release of Amro’s Asean+3 Regional Economic Outlook 2024 report here today.
Hoe said Malaysia, dubbed the Silicon Valley of the East, is expected to attract more semiconductor industries in the future and will be the major beneficiary of the upswing of the semiconductor cycle that is expected to peak towards the end of the year.
Meanwhile, Amro group head Allen Ng said it is reasonable to expect that Malaysia will be able to surpass the World Bank’s benchmark for nominal gross domestic product of about US$13,000 for high-income economy.
He cautioned that Malaysia, like any other country in the region, continues to face structural headwinds such as demographic concern, productivity growth and workforce skill level, and these concerns need to be looked into.
