The Investment Climate Statement Chapter of the CCG is provided by the State Department.
Over the past ten years, Malaysia has emerged as an attractive regional hub for logistics services, information and communications technology (ICT), and medical tourism. Malaysia’s strategic location at the heart of Southeast Asia’s market, with 649 million people and a combined GDP of US$3 trillion, opens commercial opportunities for companies looking to expand their regional and global supply chain and operations.
Despite the global pandemic and an unexpected administration change in 2020, the commercial environment remains promising for foreign companies. Malaysia offers well-developed infrastructure, an English-speaking business and consumer environment, a well-established legal framework, an affinity for U.S. products, and the ability to easily repatriate capital and profits. Malaysia’s level of economic development drives both consumer and business demand for products and services. Its consumers, though price sensitive, are accustomed to several decades of steady growth. Malaysians are attracted to, and are familiar with, international brands, quality healthcare products and services, as well as ecological lifestyle offerings securing the country as an attractive, business-friendly destination.
The United States is Malaysia’s third-largest trading partner. Malaysia’s total trade for 2019 was $453 billion, a 2.5 percent decrease in value compared to 2018. While lower trade was recorded with the top two trading partners, China (1st) and Singapore (2nd), trade with the United States is increasing. Malaysia is classified as an upper-middle income country, with a GNI per capita of US$10,870, third in ASEAN after Singapore (1st) and Brunei (2nd). Over the past five years, the country’s GDP has grown consistently at an average 4.84% per year. It has also maintained a steadily low inflation rate, an average of 1.84% over the last five years. Malaysia is one of the most open economies in the world, with a trade to GDP ratio averaging over 130% since 2010.
Malaysia’s export-orientated economy is expected to contract along with the global economy in 2020. This economic pressure, combined with the government containment measures implemented in March-June, will result in real GDP contracting by 5.1% in 2020. The economic growth and unemployment rate are expected to fully recover by 2022, despite this contraction in 2020.
The United States continues to enjoy a favorable trade and investment position in Malaysia. Despite the recent challenges, market potential does exist for foreign companies particularly in the areas of advanced manufacturing, information and communication technologies (ICT), healthcare, and environmental technologies.
- Economic Intelligence Unit (EIU) Country Reports, Department of Statistics Malaysia, Bank Negara Malaysia Monthly Statistical Bulletin, April 2020