Economy - overview After decades of high GDP growth, Malaysia's economy - shaken by the ongoing regional financial crisis in 1997/98 - is forecast by the government to grow only 4%-5% in 1998; private forecasts project the growth rate could be as low as 2%. The sharp decline in local currency and stock markets forced Kuala Lumpur to announce tough cost-cutting measures - on top of a contractionary budget - to further reduce the current account deficit to 3% of GDP in 1998 from 5.5% in 1997. To achieve this goal, Kuala Lumpur will cut government spending by 20% and continue to slash big-ticket imports and defer large-scale infrastructure projects. Government austerity and slower growth mean increased unemployment and higher interest rates that will bite into corporate earnings.

GDP purchasing power parity - $227 billion (1997 est.)

GDP - real growth rate 7.4% (1997 est.)

GDP - per capita purchasing power parity - $11,100 (1997 est.)

GDP - composition by sector
agriculture: 14%
industry: 45%
services: 41% (1995 est.)

Inflation rate - consumer price index 36% (1996)

Labor force
total: 8.398 million (1996 est.)
by occupation: manufacturing 25%, agriculture, forestry, and fisheries 21%, local trade and tourism 17%, services 12%, government 11%, construction 8% (1996)

Unemployment rate 2.6% (1996 est.)

Budget
revenues: $22.6 billion
expenditures: $22 billion, including capital expenditures of $5.3 billion (1996 est.)

Industries Peninsular Malaysia - rubber and oil palm processing and manufacturing, light manufacturing industry, electronics, tin mining and smelting, logging and processing timber; Sabah - logging, petroleum production; Sarawak - agriculture processing, petroleum production and refining, logging

Industrial production growth rate 14.4% (1995)

Electricity - capacity 7.83 million kW (1995)

Electricity - production 42 billion kWh (1995)

Electricity - consumption per capita 2,132 kWh (1995)

Agriculture - products Peninsular Malaysia - natural rubber, palm oil, rice; Sabah - subsistence crops, rubber, timber, coconut, rice; Sarawak - rubber, pepper; timber

Exports
total value: $78.2 billion (1996)
commodities: electronic equipment, petroleum and petroleum products, palm oil, wood and wood products, rubber, textiles
partners: US 21%, Singapore 20%, Japan 12%, Hong Kong 5%, UK 4%, Thailand 4%, Germany 3% (1995)

Imports
total value: $78.4 billion (1996)
commodities: machinery and equipment, chemicals, food
partners: Japan 27%, US 16%, Singapore 12%, Taiwan 5%, Germany 4%, South Korea 4% (1995)

Debt - external $27.5 billion (1995 est.)

Economic aid
recipient: ODA, $45 million (1993)

Currency 1 ringgit (M$) = 100 sen

Exchange rates ringgits (M$) per US$1 - 4.3985 (January 1998), 2.8133 (1997), 2.5159 (1996), 2.5044 (1995), 2.6243 (1994), 2.5741 (1993)

Fiscal year calendar year

NOTE: The information regarding Malaysia on this page is re-published from the 1998 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Malaysia Economy 1998 information contained here. All suggestions for corrections of any errors about Malaysia Economy 1998 should be addressed to the CIA.