Big thinkers

Article Abstract:

Malaysian Prime Minister Mahathir Mohamad's Vision 2020 programme aims to turn Malaysia into one of the world's fully developed nations by 2020. This ambitious project would require an annual growth rate of 7%. Malaysia has developed at an enormous rate since independence in 1957 and has achieved annual growth rates of 8% since 1988, but analysts foresee problems in the future. The Malaysian labour market is tightening in the 1990s, and increasing salaries are eroding the labour cost advantage. Economic problems in Thailand are also affecting confidence in Malaysia.

Economic Programs, Administration of Economic Programs, Cover Story, Economic policy, Economic development

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Mind the gap: Malaysia's surging trade deficit prompts concern

Article Abstract:

Malaysia's overall economy seems sound but one of the few danger signs, a surging trade and current-account deficit, has many economists calling for the govt to apply the brakes. The country traditionally enjoys a full-year trade surplus, though its current account, which includes services, is usually in the red. However, with the trade deficit at M$6.8 billion for the first seven months of 1995, or 14 times that of a year earlier, some experts want the country to postpone several of its huge infrastructure projects.

Balance of trade

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Heat stroke?

Article Abstract:

Some economists see signs of strain caused by Malaysia's rapid growth, notably in soaring property costs and a tight labor market, which together could fuel inflation. Private projections of GDP growth for 1995 exceed 9%, up from 8.7% in 1994, and inflation could easily run over 4%. The current-account deficit will likely swell from M$11.6 billion last year to M$14.1 billion this year, much of it due to imports of capital goods. A high savings rate of 34% of GDP is not damping private consumption.

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