introduction to macroeconomics group project macroeconomic study of selected economy malaysia

DUY TAN UNIVERSITYECONOMIC - FINANCE DEPARTMENT  Nguy nễ Th Thùy Trangị 28204553604

 Nguy nễ Th Thu Hoàiị 28204551902

Date: : 5 Dec., 2023th

7 Major exporting goods and services 12

8 Major importing goods and services 13

SUMMARY AND CONCLUSION 14

Appendix A - Map of geographical location of Malaysia 18

Appendix-B - Team members’ Roles and Responsibilities 19

COUNTRY BACKGROUND

The world economy is a comprehensive system of international economic relations, including relations of production, distribution, exchange, and consumption of goods and services between countries Countries around the world all have certain contributions to the world economy, including Malaysia Malaysia is a multi-ethnic country with a population of over 33 million people The majority of the population is Malay, but there are also significant Chinese, Indian, and indigenous minority groups The official language of Malaysia is Malay, but English is also widely spoken The west of Malaysia is bordered by Thailand to the north, Singapore to the south, and the East Sea to the east The east of Malaysia is bordered by: Indonesia to the east, Brunei to the northeast, and the East Sea to the south The currency unit of Malaysia is the Malaysian ringgit (MYR) As of October 4, 2023, the exchange rate of MYR to USD is approximately 1 MYR = $0.226 USD Malaysia is a federal constitutional monarchy The system of government is closely modeled on the Westminster parliamentary system, a legacy of British colonial rule The head of state is the Yang di-Pertuan Agong, commonly known as the Monarch, who is the head of state and the Prime Minister is the head of government The country follows a multi-party system Malaysia's economic system is a free market economy, with moderate government intervention The Malaysian government plays an important role in economic direction and development, through macroeconomic policies, economic development programs, and business support policies Malaysia's economy has experienced significant growth over the years, especially from the 1980s onwards With a favorable geographical location and an open economic policy, Malaysia has become one of the fastest-growing economies in Southeast Asia With a diverse and independent economy, Malaysia has succeeded in building a solid infrastructure, attracting foreign investment, and developing important industries Key sectors include the processing industry, financial services, tourism, and agriculture Malaysia is a country with a dynamically developing economy, with an average annual GDP growth rate of about 6% in the period 2010-2022 In 2022, Malaysia's GDP will reach 397.5 billion USD, ranking 33rd in the world and 11th in Asia.

ECONOMIC INDICATORS

1 Economic output (GDP)

Economic Productivity GDP:

- From 2018-2019, Malaysia's GDP exceeded $350 billion, $40 billion larger than Vietnam Factors such as developed technology, infrastructure, quality of human resources, etc have helped Malaysia's economy develop better than Vietnam's.

- But the situation has completely changed since the Covid-19 pandemic began Malaysia's GDP has decreased sharply, on the contrary, although it was also affected, Vietnam still maintained the index at a stable level, increasing steadily from 2019 to 2020.

- It is the State's timely support policies as well as the rapid change in the way businesses work (from offline to online) that have kept the country's economy at a stable level - From 2020 to 2022, Malaysia has had a strong return to development but is still ranked behind Vietnam with a GDP of 406 billion USD, a loss of 2 billion USD when compared to our country, thanks to foreign investment capital strength and productivity growth.

2 GDP growth rate

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- Severely due to the COVID-19 pandemic, the growth rates of both countries have decreased sharply But the worst situation is still Malaysia with negative GDP growth, while Vietnam still has growth but not much.

- From 2021 to 2022, the economy will recover, especially Malaysia with a growth rate in 2022 of more than 8.7% higher than Vietnam Although growth is not as expected, Vietnam still ranks 5th in terms of GDP in Southeast Asia, and Malaysia continues to hold the 6th position in the group of major economies in the region.

3 GDP per capita

- Although Vietnam's GDP is exceeding Malaysia's GDP, in terms of GDP per capita, Malaysia is 3 times higher than Vietnam, meaning Malaysians are 3 times richer than Vietnamese people According to data from visualcapitalist, in 2021, Malaysia's GDP per capita reached 11,378 USD, while Vietnam only reached 3,756 USD, only equal to the income of Malaysians in 1994.

- This happens because Malaysia's population is much lower than Vietnam's.

4 Unemployment rate

- The COVID-19 pandemic that took place from 2019 to 2021 has greatly impacted the jobs of people in the two countries, production stagnated, businesses changed their working form from offline to online, many businesses went bankrupt and withdrew from the market, etc But ignoring that factor, the current unemployment rates of Vietnam and Malaysia are still very high, specifically Vietnam reached 1.90% and Malaysia reached 3.70%.

- Regarding Malaysia, the cause of the high unemployment rate in this country lies in the labor force and the nature of work The main workforce in factories and businesses are foreigners or migrants, accounting for the majority compared to local workers In addition, many fields in Malaysia have to rely on foreign workers to perform "3D work" (work considered difficult and dangerous) Although the monthly salary for jobs like this is often quite high, many people still do not want to do the job because the work environment is not suitable.

- For Vietnam, the quality of human resources and wages at work Although the Government has issued policies to help enhance the quality of education and training, the quality of human resources is still low, making it impossible for many businesses to find suitable personnel In addition, the current income of some jobs has decreased compared to

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previous years Although the decrease is not much, this has also had some impact on the decision of employees to continue working at the enterprise.

5 Inflation rate

- For Vietnam, the inflation rate in the period from 2019-2021 is low and stable because the Covid-19 epidemic caused people's consumer demand to decline sharply By 2022, the war between Ukraine and Russia has caused the price of gasoline and food items to increase, and the world economy is showing signs of recession, which is a factor that increases the inflation rate in the country Vietnam.

- For Malaysia: As the country with the lowest inflation rate among ASEAN member countries, although prices of domestic goods have increased, thanks to the Malaysian government's commitment to control commodity prices and staples are inflated by providing subsidies that keep the country's inflation rate low

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+ The reason for Malaysia's negative inflation rate in 2020 is due to the impact of Covid-19 The pandemic has caused an economic recession, many people are unemployed, leading to a reduction in consumer demand and production This causes the prices of many products to decrease and causes some difficulties for businesses But negative inflation also benefits consumers, helping them save money.

=> Although Malaysia's GDP-related indicators are somewhat more unfavorable than Vietnam's, the country still maintains its inflation rate lower than 2.1%

+) From 2018 to 2020, the import situation of Vietnam and Malaysia decreased, however, the reduction rate of both countries was clearly different Malaysia from 61.8% (2018) down to 55.2% (2020) down 6.6% Vietnam from 80.2% (2019) down to 78.9% (2020) down 1.3% Due to the world economic situation during the period, This period has many fluctuations, especially the COVID-19 pandemic, which has caused the Malaysian economy to decline, thereby reducing import demand The pandemic has also caused commodity prices to increase, commodity prices to increase causing Vietnam to tighten import spending In addition, some of Vietnam's import restriction policies also contribute to reducing imports

+) From 2020-2021, the cashew import situation will change positively because at this time the pandemic situation is under control and the world economic situation is increasingly recovering Prices decreased and import policies were also applied by the two countries at this time Malaysia from 61.7%(2020) to 66.9% increased by 5.2%(2021) while Vietnam from 78.9%(2020) to 93.2(2021) increased by 14.3%

Imports of goods and services (% of GDP) – Malaysia

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-Export

+) From 2018 to 2020: Malaysia's export situation decreased from 68.6% (2018) to 61.6 (2020), down 7% Meanwhile, Vietnam's export situation during this period remained unchanged from 84.4% in 2018 and 2020 Due to the period affected by the world economic recession and the severe impact of the COVID pandemic -19 has reduced export demand Therefore, the export situation of both countries during this period tends to decrease and there is no growth.

+) Unlike the 2018-2020 period, the 2020-2022 period due to economic restructuring has caused products to increase in value; participating in free trade agreements such as CPTPP and RCEP has helped the market The export markets of Vietnam and Malaysia are expanding Therefore, the export situation of Vietnam and Malaysia has increased in recent years.

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Exports of goods and services (% of GDP) - Việt Nam

=> The total export value is greater than the total import value => The trade balance of Vietnam and Malaysia in recent years has tended to be in surplus.

7 Major exporting goods and services

- Goods

+ Palm oil and palm oil products: Malaysia is the second largest producer and exporter of palm oil in the world Palm oil is used in many different products, including foods, cosmetics, shampoos, and detergents.

+ Electrical machinery and equipment: Malaysia is a manufacturing hub for electrical machinery and equipment These products are exported to many markets, including China, Japan, and the United States.

+ Electronic products: Malaysia is a manufacturer and exporter of electronic products, including mobile phones, computers, and home appliances.

+ Textiles and apparel products: Malaysia is a manufacturer and exporter of textiles and apparel products These products are exported to many markets, including the United States, China, and Japan.

+ Wooden furniture and wood products: Malaysia is a manufacturer and exporter of wooden furniture and wood products These products are exported to many markets, including the United States, China, and Japan.

- Service

+ Tourism: Malaysia is a popular tourist destination, attracting millions of visitors each year Tourists come to Malaysia to visit historical and cultural attractions, as well as to relax on the beaches.

+ Trade: Malaysia is an important trade hub, with many multinational companies headquartered here These companies provide financial, transportation and logistics services.

+ Education: Malaysia is an international education hub, attracting students from all over the world Malaysia's universities and colleges offer high-quality educational programs at affordable costs.

+ In recent years, Malaysia has been making efforts to diversify its export structure, reducing its dependence on palm oil and palm oil products The Malaysian government has introduced many policies to support businesses, encouraging investment in new industries, such as high technology, manufacturing and high-tech agriculture

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8 Major importing goods and services

- Goods

+ Machinery and equipment: Malaysia needs to import machinery and equipment to serve the production process These machines and equipment are imported from many countries, including China, Japan and the United States.

+ Raw materials: Malaysia needs to import raw materials to produce its export products These raw materials are imported from many countries, including Indonesia, China and Australia.

+ Consumer products: Malaysia also needs to import a number of consumer products, including food, beverages, clothing and electronics These products are imported from many countries, including China, Thailand and Indonesia.

- Service

+ Transport services: Malaysia needs to import transport services to transport goods and tourists to and from Malaysia These transportation services are imported from many countries, including China, Japan and the United States.

Financial services: Malaysia needs to import financial services to support its business operations These financial services are imported from many countries, including Singapore, Hong Kong and Japan.

+ Information technology services: Malaysia needs to import information technology services to develop its information technology infrastructure These information technology services are imported from many countries, including the United States, Singapore and China.

SUMMARY AND CONCLUSION

- Malaysia's economy is a new industrial market economy approaching development capacity.

- Malaysia is considered a place to develop business lighting.

- Malaysia's economic structure is divided into three main sectors: agriculture, industry and services Of these, services are the sector with the largest proportion, accounting for 49% of GDP in 2019, followed by industry (41%) and agriculture (10%).

- Malaysia's key industries include electronics, automobile manufacturing, chemical manufacturing, machinery and equipment manufacturing, and food and beverage manufacturing Key specialized services include tourism, finance, banking, insurance, telecommunications and transportation.

- Outstanding achievements of the Malaysian economy in recent years include:

+ Economic growth is stable, with an average GDP growth rate of 5.3% in the period from 2010 to 2019.

+ Poverty reduction with poverty rate Reducing hunger from 35.6% in 1970 to 4.3% in 2019 + Improve people's quality of life, with per capita income increasing from 1,200 USD in 1970 to 11,484 USD in 2019.

However, Malaysia is still a middle-income country, poor groups still exist, and income inequality is still high compared to developed countries.

Economic growth tends to decline sharply and there is a risk of being stuck in the middle-income trap.

With standard inputs into the nation's developer pool, premium inputs remain a major challenge for Malaysia.

The economic well-being of citizens in this economy:

In the past five years, the economic welfare of the Malaysian people has significantly improved Malaysia's per capita GDP increased from $11.380 in 2018 to $13.108 in 2022 This means that the living standards of the Malaysian people are significantly improving.

Year Per capita GDP

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