Malaysia Economy

The country has long benefitted from its fast-growing retail lending industry, which has kept consumer demand robust and reduced the economy’s dependence on volatile export markets. But as household debt has piled up to one of the highest levels in Asia, analysts are increasingly seeing credit growth as a source of risk and potential...

With hotly contested elections behind it and favourable conditions in global markets, Malaysia’s government is on a drive to rein in traditionally large fiscal deficits. Having already brought down the federal deficit from a peak of 6.7% of GDP in 2009 to 3.9% in 2013, the government is aiming for a further reduction to 3% by 2015 and a...

As chair of ASEAN for 2015 Malaysia is expected to announce the adoption of the ASEAN Economic Community (AEC) – even if not technically complete – highlighting its own progress in liberalisation to give new impetus to the next stage of regional integration.

To understand Malaysia’s criteria for recruiting foreign investment, one has to understand something of the country’s tradition of development planning. Malaysia avoided Asia’s post-war wave of communism, but the nationalist government has a similar-sounding tradition of crafting five-year plans. Although short of real central planning, these...

Already one of the most trade-oriented economies in the world and an established regional leader in attracting foreign investment, Malaysia now aims to compete with Singapore as an alternative regional trade and investment hub for the rapidly developing Association of South-East Asian Nations (ASEAN) bloc.

Malaysia used to benefit from the EU’s generalised system of preferences (GSP) scheme, which offers tariff reductions on exports to developing countries. However, the World Bank’s decision to award the country upper-middle-income-nation status ended its eligibility for these lower levies in January 2014. While EU representatives are confident...