Malaysia's Economic Growth and Transition to High Income : An Application of the World Bank Long Term Growth Model

Devadas, Sharmila ; Guzman, Jorge ; Kim, Young Eun ; Loayza, Norman ; Pennings, Steven

World Bank, Washington, DC

关键词: LONG-TERM GROWTH MODEL;    LTGM;    ECONOMIC GROWTH;    TOTAL FACTOR PRODUCTIVITY;    HUMAN CAPITAL;   

DOI  :  10.1596/1813-9450-9278
RP-ID  :  WPS9278

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper studies economic growth inMalaysia, with the purpose of assessing the potential toattain the status and characteristics of a high-incomecountry. Future economic growth is simulated under abusiness-as-usual baseline, where the growth drivers followtheir historical or recent trends, and under differentscenarios of reform, using the World Bank Long-Term GrowthModel (LTGM). Under the business-as-usual baseline,Malaysia's GDP growth is expected to decline from 4.5to 2.0 percent over the next three decades, following thecountry's transition to high income in 2024 (whichmight be delayed due to the effects of COVID-19). Thisdecline is partly due to demographics, but also a decliningmarginal product of private capital and slowing growth ratesof total factor productivity and human capital. Strongreforms are required for Malaysia to grow beyond what isexpected based on historical trends, especially for humancapital, female labor force participation, and total factorproductivity. In the strong reform scenario, based on growthdrivers achieving a target corresponding to the 75thpercentile of high-income countries, GDP growth is expectedto have a substantially higher trajectory, reaching 3.6percent by 2050.