Malaysia Economic Monitor, June 2014 : Boosting Trade Competitiveness

This economic update provides an overview for 2013 and early 2014 in Malaysia and an analysis of structural trends in trade competitiveness. The economy overcame a weak start in 2013 to experience GDP growth through 2014. The improved performance was driven mainly by a recovery in exports, including of the long-ailing electrical and electronics sector. The outlook remains favorable and GDP is expected to continue growing through 2015. Growth will be sustained by positive external conditions, with foreign demand outweighing headwinds in domestic demand. Investment and imports of capital goods will remain robust as large projects move forward. Medium-term fiscal consolidation remains on track and the debt-to-GDP ratio has stabilized, but additional spending measures are needed for the Government to meet its 2014 deficit target. The central bank has signaled that it may have to tighten policy to avoid the build-up of financial imbalances. Labor markets are healthy, and Malaysia has enjoyed higher employment levels, real wage gains, and higher labor incomes. External risks to the economic outlook have receded, but the high share of Malaysia's foreign debt means it is sensitive to international volatility. Boosting exports to fully leverage the improved external environment will be critical for sustained growth. The report's analysis of Malaysia's trade competitiveness focuses on its ability to grow exports and the domestic value-added. Malaysia's exports had been faltering since before the Global Financial Crisis. The core electrical and electronics sector declined in the 2000s, and Malaysia's domestic value-added is relatively low due to limited domestic linkages. Exports of services have also lagged and remain an area of significant potential. Restrictive Government policies play a role in hindering export growth, although the Government has recently embarked on a liberalization of service sectors. Improving domestic value-added tasks will require addressing skill gaps. Finally, Malaysia's upcoming chairmanship in ASEAN offers concrete avenues to boost trade competitiveness.

Bibliographic Details

Main Author:	World Bank
Language:	English en_US
Published:	Bangkok 2014-06
Subjects:	ADVANCED ECONOMIES, ANNUAL GROWTH, ASSET SALES, BANK OFFICE, BANKING SECTOR, BANKING SYSTEM, BENCHMARK, BENCHMARK INTEREST RATE, BILL, BUFFERS, CAPITAL FLOWS, CAPITAL GOODS, CAPITAL GOODS IMPORTS, CAPITAL MARKETS, CAPITAL OUTFLOWS, CAPITAL RATIO, CENTRAL BANK, COMMODITIES, COMMODITY, COMMODITY EXPORTS, COMMODITY PRICES, COMMUNICATION TECHNOLOGY, COMPARATIVE ADVANTAGE, CONSENSUS FORECASTS, CONSUMER GOODS, CONSUMER PRICE INFLATION, CONSUMPTION GROWTH, CORPORATE INCOME TAXES, CREDIT CARDS, CURRENCY ASSETS, CURRENCY SWAPS, CURRENT ACCOUNT, CURRENT ACCOUNT BALANCE, CURRENT ACCOUNT SURPLUS, CURRENT ACCOUNTS, DEBT, DEBT SECURITIES, DEPOSITS, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPING ECONOMIES, DEVELOPMENT ECONOMICS, DEVELOPMENT FINANCE, DEVELOPMENT POLICY, DEVELOPMENT STRATEGIES, DIVIDEND, DOLLAR VALUE, DOMESTIC COMPETITION, DOMESTIC CONDITIONS, DOMESTIC CURRENCY, DOMESTIC DEMAND, DOMESTIC DEMAND GROWTH, DRAG ON GROWTH, ECONOMIC COOPERATION, ECONOMIC DEVELOPMENTS, ECONOMIC OUTLOOK, ECONOMIC PERFORMANCE, ECONOMIC RESEARCH, EMERGING ECONOMIES, EMERGING MARKET, EMERGING MARKETS, ENERGY EXPORTS, ENTRY POINT, EQUITIES, EQUITY MARKET, EQUITY MARKETS, EXPORT GROWTH, EXPORT MARKET, EXPORT PERFORMANCE, EXPORTERS, EXPOSURE, EXTERNAL DEMAND, EXTERNAL TRADE, FEDERAL RESERVE, FINANCIAL CRISIS, FINANCIAL INSTITUTIONS, FINANCIAL MARKET, FINANCIAL SECTOR, FINANCIAL SERVICES, FISCAL CONSOLIDATION, FIXED CAPITAL, FIXED INVESTMENT, FIXED INVESTMENTS, FLEXIBLE EXCHANGE RATE, FLEXIBLE EXCHANGE RATE REGIME, FOOD PRICES, FORECASTS, FOREIGN CURRENCIES, FOREIGN CURRENCY, FOREIGN CURRENCY ASSETS, FOREIGN DIRECT INVESTMENT, FOREIGN INVESTORS, FOREIGN MARKETS, FOREIGN VALUE, FREE TRADE, FREE TRADE AGREEMENT, FREE TRADE AGREEMENTS, FUTURES, GDP, GDP PER CAPITA, GLOBAL ECONOMIC PROSPECTS, GLOBAL ECONOMY, GLOBAL PORTFOLIO, GLOBAL TRADE, GOVERNMENT DEFICIT, GOVERNMENT SECURITIES, GROSS DOMESTIC PRODUCT, GROSS FIXED CAPITAL FORMATION, GROSS NATIONAL INCOME, GROWTH IN TRADE, GROWTH RATE, GROWTH RATES, HIGH-INCOME COUNTRIES, IMBALANCES, IMPORT, IMPORT CONTENT, IMPORT DEMAND, IMPORTS, INCOME GROWTH, INCOME TAX, INCOMES, INFLATION, INFLATION RATE, INFLATIONARY PRESSURES, INFORMATION TECHNOLOGY, INTELLECTUAL PROPERTY, INTEREST RATES, INTERNATIONAL CAPITAL, INTERNATIONAL CAPITAL MARKETS, INTERNATIONAL COOPERATION, INTERNATIONAL LABOUR ORGANIZATION, INTERNATIONAL RESERVES, INTERNATIONAL TRADE, INVENTORIES, ITC, LABOR FORCE, LABOR MARKET, LABOR MARKETS, LEVERAGE, LIBERALIZATION, LOCAL CURRENCY, LOOSE MONETARY POLICIES, M3, MACROECONOMIC STABILITY, MARKET CONDITIONS, MARKET PRESSURES, MARKET SHARE, MARKET SHARES, MIDDLE INCOME COUNTRIES, MONETARY CONDITIONS, MONETARY FUND, MONETARY POLICIES, MONETARY POLICY, MORTGAGE, MORTGAGE DEBT, MORTGAGE LOANS, MULTINATIONAL CORPORATION, NATIONAL INCOME, NET CAPITAL, NET EXPORTS, NOMINAL DEPRECIATION, OIL EXPORTS, OIL PRICES, OUTPUT GAP, PENSIONS, PERSONAL COMPUTER, PORTFOLIO, PORTFOLIO FLOWS, PORTFOLIO INVESTMENT, PORTFOLIOS, POTENTIAL OUTPUT, PRICE HIKES, PRICE INDEX, PRIVATE CONSUMPTION, PRIVATE INVESTMENT, PRODUCTIVITY GROWTH, PROPERTY RIGHTS, PUBLIC INVESTMENT, PUBLIC-PRIVATE PARTNERSHIP, RE-EXPORTS, REAL EFFECTIVE EXCHANGE RATE, REAL ESTATE, REAL GDP, REAL INTEREST RATE, REAL WAGE GROWTH, REGIONAL TRADE, REGIONAL TRADE AGREEMENTS, RISK MANAGEMENT, SECURITIES MARKET, SETTLEMENT, SHORT-TERM EXTERNAL DEBT, SKILLS SHORTAGE, SKILLS SHORTAGES, SLOWDOWN, SPARE CAPACITY, SUPPLY CONDITIONS, TARIFF BARRIERS, TAX, TAX HIKES, TAX REVENUES, TOTAL EXPORTS, TOTAL REVENUE, TRADE COMPETITIVENESS, TRADE NEGOTIATIONS, TRADE RESTRICTIVENESS, UNCERTAINTY, UNEMPLOYMENT, UNEMPLOYMENT RATE, VALUE ADDED, VOLATILITY, WAGE GROWTH, WAGES, WORKING CAPITAL, WORLD DEVELOPMENT INDICATORS, WORLD TRADE, WORLD TRADE ORGANIZATION, WTO,
Online Access:	http://documents.worldbank.org/curated/en/2014/06/19734290/malaysia-economic-monitor-boosting-trade-competitiveness https://hdl.handle.net/10986/19303
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