Economic and political overview in Malaysia

Running head: ECONOMIC ANALYSIS OF MALAYSIA
Economic Analysis of Malaysia
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ECONOMIC ANALYSIS OF MALAYSIA1
Executive Summary
The report discussed the macroeconomic condition of Malaysia by analysis several
macroeconomic indicators. The indicators studied in the report are GDP growth, inflation rate,
unemployment rate, interest rate, income tax, balance of trade and labour productivity. From the
analyses of these macroeconomic indicators, it is found that the country is gradually moving
towards recession with slowdown in the economy. The major requirement of the country has
been found to be the policies that would boost the economy and improve the economic output.
The report recommended expansionary monetary fiscal policies to deal with the situation of
economic slowdown.

ECONOMIC ANALYSIS OF MALAYSIA2
Table of Contents
Introduction......................................................................................................................................3
Economy of Malaysia......................................................................................................................4
GDP growth in Malaysia.............................................................................................................4
Unemployment rate.....................................................................................................................5
Inflation rate.................................................................................................................................7
Balance of Trade..........................................................................................................................8
Income tax...................................................................................................................................9
Interest rate................................................................................................................................10
Labour productivity...................................................................................................................11
Conclusion.....................................................................................................................................12
Recommendation...........................................................................................................................13
Reference.......................................................................................................................................15

ECONOMIC ANALYSIS OF MALAYSIA3
Introduction
Macroeconomic theories are the theories that explains the changes occurring in an
economy as a whole. Various factors indicate the health of a country’s economy. The
macroeconomic factors are gross domestic product, unemployment, taxes, inflation, income
distribution, resource utilization, trade and many more. Many theories of macroeconomics have
been developed so far. The first macroeconomic theory developed was under classical economics
(O’Brien 2017). The other macroeconomic theories that have been developed are Keynesian
economics, aggregate market analysis. IS-LM analysis, monetarism and neo-classical economics.
All the theories that concerns the macroeconomic aspect of a country suggests exclusively
unique things. These theories explains how macroeconomic policies implemented by the
government of country impacts the corresponding economy except in the case of classical
economics. It is because classical economics states that market equilibrium is best achieved
under invisible hand. On the other hand, Keynesian economics states that business cycle of an
economy is highly dependent on the aggregate demand. It is the aggregate demand that drives the
production of an economy. The major macroeconomic theory that explains the impact of the
monetary and fiscal policy implemented by the government of a country is the aggregate demand
and supply model. The IS and LM theory explains the relation between the product market and
the financial market. There are other important macroeconomic theories that explains economy
of a country as a whole. In order to understand the implication of macroeconomic theories on an
economy the economy of Malaysia has been considered in this report. Malaysia is a developing
economy present in the continent of Asia. Considering all the macroeconomic indicators of the
economy of the country the report discusses the implication of macroeconomic theories. In