How has the structure of Malaysia’s GDP changed over the years?
GDP can be determined in three ways, all of which should, in principle, give the same result. They are the production (or output) approach, the income approach, and the expenditure approach. The expenditure approach is summarized in the formula: GDP = C (private consumption) + I (Investment) + G (public consumption) + X (export of goods and services) – M (import of goods and services).
The production approach measures the market value of all final goods and services calculated during the period. It sums up value add of each production process to avoid double counting. The value-added shares presented in the World Development Indicators for agriculture, industry, and services may not always add up to a hundred percent due to FISIM and net indirect taxes.
Malaysia’s GDP composition
Malaysia’s economy traditionally relied heavily on export as the main driver for growth. The export of goods and services (X) accounted on average 100% of GDP over the past two decades. After the 1997 crisis, the proportion of X has increased even more at the expense of investment (I). However, since 2000, domestic consumption has been gaining its importance as a driver for the Malaysian economy. On the production side, we started to see the clear direction that the Malaysian economy is shifting toward a service-based economy, after almost four decades of industrialization.
What is the size of Malaysia’s economy? See Chart
What is the size of Malaysia’s population? See Chart
What is the demographic structure of Malaysia? See Chart
How much does Malaysia’s economy rely on its natural resources? See Chart
How much does Malaysia’s economy rely on external trade? See Chart
What are the key economic regions in Malaysia? See Chart
Economic Freedom Index: How free is Malaysia’s economy? See Chart