Key Policy Insights

Malaysia has performed very successfully in recent years compared to other emerging market countries, with a rapid catching-up towards living standards prevailing in OECD countries. Malaysia’s 2017 per capita GDP (about USD 27 000 in 2011 PPP prices) was close to two-thirds of the OECD average () and exceeded levels in Mexico, Turkey and Chile (Box 1). Thanks to diversification of export products and improved macroeconomic prudence, Malaysia’s resilience to external shocks has strengthened. The country’s Eleventh Five-year Plan (2016-20) set a target of achieving high-income country status by 2020 while ensuring inclusive and sustainable growth. The Mid-Term Review of the Eleventh Plan, announced in October 2018, postponed the target year to 2024 due to recent macroeconomic developments. To achieve the planned target would require to maintain the pace of growth and to focus on productivity gains. High-quality growth requires further efforts towards social inclusiveness and environmental protection.