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Malaysia's Economic Growth and Transition to High Income : An Application of the World Bank Long Term Growth Model (LTGM) / Sharmila Devadas.
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Devadas, Sharmila.
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Economic Growth.
- Economic Theory and Research.
- Human Capital.
- Innovation.
- Labor Force Participation.
- Labor Markets.
- Long-Term Growth Model.
- LTGM.
- Macroeconomics and Economic Growth.
- Market Efficiency.
- Private Investment.
- Social Protections and Labor.
- Total Factor Productivity.
- Local Subjects:
- Economic Growth.
- Economic Theory and Research.
- Human Capital.
- Innovation.
- Labor Force Participation.
- Labor Markets.
- Long-Term Growth Model.
- LTGM.
- Macroeconomics and Economic Growth.
- Market Efficiency.
- Private Investment.
- Social Protections and Labor.
- Total Factor Productivity.
- Physical Description:
- 1 online resource (42 pages)
- Other Title:
- Malaysia's Economic Growth and Transition to High Income
- Place of Publication:
- Washington, D.C. : The World Bank, 2020.
- System Details:
- data file
- Summary:
- This paper studies economic growth in Malaysia, with the purpose of assessing the potential to attain the status and characteristics of a high-income country. Future economic growth is simulated under a business-as-usual baseline, where the growth drivers follow their historical or recent trends, and under different scenarios of reform, using the World Bank Long-Term Growth Model (LTGM). Under the business-as-usual baseline, Malaysia's GDP growth is expected to decline from 4.5 to 2.0 percent over the next three decades, following the country's transition to high income in 2024 (which might be delayed due to the effects of COVID-19). This decline is partly due to demographics, but also a declining marginal product of private capital and slowing growth rates of total factor productivity and human capital. Strong reforms are required for Malaysia to grow beyond what is expected based on historical trends, especially for human capital, female labor force participation, and total factor productivity. In the strong reform scenario, based on growth drivers achieving a target corresponding to the 75th percentile of high-income countries, GDP growth is expected to have a substantially higher trajectory, reaching 3.6 percent by 2050.
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