Putrajaya 27 August 2024
https://oe.cd/MYS
The
The current monetary policy stance is appropriate
Export
growth has recovered and is set to remain solid
Growth of goods and services exports
Average of Indonesia, Thailand and Viet Nam
Note: OECD projections as of the third quarter of 2024 (dotted lines and shaded area).
Source: OECD projections, OECD Economic Outlook, May 2024.
Growth is picking up
Source: OECD projections.
Strengthening public finances
Fiscal consolidation will need to accelerate
Note: The primary fiscal balance does not include interest expenses. Values for 2024 are projections.
Source: Ministry of Finance, Fiscal Outlook and Federal Government Revenue Estimates 2024
Future spending pressures require higher revenues
% of GDP
Baseline scenario
Mobilising additional tax revenues and cutting subsidies
Higher growth scenario
Source: OECD calculations. Federal government debt scenarios
Note: The baseline scenario assumes that public spending will need to rise to accommodate the costs of population ageing and the green transition. The blue scenario assumes that additional revenues compensate these costs, while the green scenario assumes stronger GDP growth.
Fuel subsidies should be reduced
Source: OECD Tax Revenue Statistics database.
Composition of tax revenues, 2021
Other
Goods and
Property
Social security
Corporate income
Personal income
Creating better opportunities
Impact of taxes and transfers on income inequality, latest available year
Reductions in the Gini coefficient through public policies, in points of the Gini
Source: World Bank (2023); Commitment to Equity Institute (2023).
Better access to childcare would allow more women to join the labour market
Making micro, small and medium-sized enterprises an engine of growth
Note: EU15 is an average of 15 European Union countries including Belgium Denmark, Germany, Finland, France, Greece, Ireland, Italy, Luxembourg, Netherlands, Austria, Portugal, Spain, the United Kingdom and Sweden.
Source: Asian Productivity Organisation, APO Productivity database 2023.
Administrative burdens on startups should be reduced
Product Market Regulations: Administrative burdens on start-ups
Index scale of 0-6 from least to most restrictive
Source: OECD, Product Market Regulation database; and OECD-WBG, Product Market Regulation database.
A more equal playing field between micro, small and mediumsized enterprises and state-owned enterprises would help small firms grow
Product Market Regulations: Distortions from state involvement Index scale
Note: MSMEs refers to micro, small and medium enterprises.
Source: OECD, Product Market Regulation database; and OECD-WBG, Product Market Regulation database.
Competition in digital services can be strengthened
Services trade restrictiveness in telecommunications, 2020
0 (open) to 1 (closed)
Source: OECD Services Trade Restrictiveness database.
Addressing climate challenges
Rising emissions require stronger policy action, especially in the energy sector
Source: Ministry of Natural Resources, Environment and Climate Change, Malaysia.
Introducing carbon pricing would help to curb emissions
Environmental regulations could support decarbonisation
OECD Environmental Policy Stringency Index - non-market-based policies
scale 0 (least stringent) to 6 (most stringent), 2020 or latest available year
Source: OECD calculations.
Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.