The 2019 OECD Economic Survey of Malaysia was prepared by Hidekatsu Asada, Tan Kay Kiang, Ricardo Espinoza and Marieke Vandeweyer under the supervision of Patrick Lenain. It benefitted from contributions at various stages by Adam Bogiatzis, Andrew Bell, Bert Brys, Matthieu Cahen, Janos Ferencz, Alessandro Goglio, Robert Grundke, Andrés Fuentes Hutfilter, Katsuya Iino, Chris James, Korin Kane, Eija Kiiskinen, Britta Labuhn, Tadashi Matsumoto, Michael Mullan, Laura Reznikova, Mohamed Rizwan Habeeb Rahuman, Inese Rozensteine and Abu Zeid Mohd Arif. Isabelle Luong provided statistical assistance and Stephanie Henry provided editorial support. The draft report was discussed at a meeting of the Economic and Development Review Committee on 24 April 2019, with participation of representatives of the Malaysian authorities. The cut-off date for data and information used in the Economic Survey is 25 June 2019. The previous Economic Assessment of Malaysia was issued in November 2016. The Economic Survey is published under the responsibility of the Secretary-General of the OECD.Support from the governments of Japan and Malaysia is gratefully acknowledged.

Malaysia’s economy is doing well, but social and governance challenges must be addressed. The government prioritises inclusive growth and improving trust in public institutions. Further progress toward the planned target of high-income country status by 2024 will also require focusing on productivity growth with structural reforms to move up the value chain and improve skills. As well, ensuring environmental protection will improve the quality of growth. These issues are in line with the government’s priorities.

Malaysia has performed very successfully in recent years compared to other emerging market countries, with a rapid catching-up towards living standards prevailing in OECD countries. Malaysia’s 2017 per capita GDP (about USD 27 000 in 2011 PPP prices) was close to two-thirds of the OECD average () and exceeded levels in Mexico, Turkey and Chile (Box 1). Thanks to diversification of export products and improved macroeconomic prudence, Malaysia’s resilience to external shocks has strengthened. The country’s Eleventh Five-year Plan (2016-20) set a target of achieving high-income country status by 2020 while ensuring inclusive and sustainable growth. The Mid-Term Review of the Eleventh Plan, announced in October 2018, postponed the target year to 2024 due to recent macroeconomic developments. To achieve the planned target would require to maintain the pace of growth and to focus on productivity gains. High-quality growth requires further efforts towards social inclusiveness and environmental protection.