OECD on Malaysia’s Economy: GST, Fuel Subsidies, and More.

Does the Malaysian economy need GST in the longer term? In this episode of Enterprise Explores, we dive into the latest OECD Economic Survey of Malaysia with Jens Arnold, Head of Division at the OECD Economics Department to explore key insights and recommendations for Malaysia’s economic future.

Jens unpacks the findings of the survey and discusses how Malaysia can ensure sustainable growth in the face of global economic challenges. We explore strategies for enhancing tax policies and reducing the fiscal deficit, the need for better targeting of social assistance programs to support the nation’s economic development, and the importance of improving MSME productivity.

The report highlights:

GDP Growth Forecast: Malaysia’s GDP is projected to grow by 4.9% in 2024 and 4.7% in 2025, driven by robust domestic demand and a rebound in exports.

Inflation Stability: Inflation is expected to remain stable at around 2.8%, supported by prudent monetary policies.

Fiscal Deficit: Despite narrowing since the pandemic, Malaysia's fiscal deficit remains a concern, and the OECD recommends accelerating fiscal consolidation and improving tax policies.

MSME Productivity: Boosting productivity in micro, small, and medium enterprises is seen as crucial to Malaysia’s economic progress. The report suggests regulatory reforms, improving access to finance, and fostering digitalisation as key steps.

Social Protection: The report calls for better-targeted social assistance programs and expanded pension coverage to tackle inequality and support vulnerable groups.

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