Malaysia is striving to achieve the status of an "Asian Tiger," which refers to the high-growth economies of Hong Kong, Singapore, Taiwan, and South Korea.
The Central Bank Governor, Abdul Rasheed Ghaffour, emphasized the importance of sustainable growth and avoiding economic volatility. Ghaffour's vision for Malaysia includes not only economic growth but also reducing inequality, which has been a challenge for other Asian economies.
Malaysia's GDP growth rate for the first three quarters of the year exceeded expectations at 5.1%, leading the central bank to revise its projections for 2024 to a growth rate between 4.8% and 5.5%.
The semiconductor industry in Malaysia, particularly in Penang, is becoming a significant driver of economic growth. Major investments from European and U.S. companies, such as Intel's commitment of $7 billion to establish a new plant, highlight Malaysia's strategic importance in the global semiconductor supply chain. Malaysia now exports 7% of semiconductor chips globally, positioning the country as a vital player in this industry. Malaysia is also focusing on producing more advanced logic chips, essential for modern electronic devices, to further strengthen its position.
While Malaysia aims to solidify its economic standing, the central bank governor expressed concerns about potential external shocks, particularly in relation to the upcoming U.S. presidential election. Ghaffour emphasized the need for Malaysia to diversify its economy to mitigate risks associated with shifts in U.S. policy. He highlighted the importance of preparing for changes in tax, tariffs, and immigration policies that could arise from the election outcome.
In summary, Malaysia's ambition to become an Asian Tiger relies on sustainable growth, addressing inequality, and diversifying the economy. The country's semiconductor sector is a key driver of economic growth, and Malaysia is taking steps to strengthen its position in the global supply chain. While uncertainties exist, particularly in relation to the U.S. presidential election, Malaysia aims to navigate the global landscape with cautious optimism.