December 18, 2015 – The World Bank projected Malaysia’s gross domestic product (GDP) would ease to 4.5 per cent in 2016, from 4.7 per cent this year, reflecting “some slowdown in domestic demand in the course of 2015 from tighter fiscal conditions”.
In a statement to mark the launch of the Malaysia Economic Monitor, the international financial body said overall, domestic demand was projected to grow and would remain the main driver of growth “in a context of soft global demand”.
The December 2015 edition of the Malaysia Economic Monitor focused on the role of immigrant labour, suggesting a 10 per cent net increase of low-skilled foreign workers might boost Malaysia’s real GDP by up to 1.1 per cent.
It is estimated that there are 2.1 million registered immigrants in Malaysia, with likely over one million who are undocumented.
World Bank Country Director for Malaysia and Southeast Asia Ulrich Zacau said strengthened immigration policies and management were needed to tap into the potential.
“Immigrant labour can bring critical skills and help Malaysia become a high-income inclusive economy,” he said.
The report suggested that up to five new jobs might be created for Malaysians in a given state and sector, two of them female, for every 10 new immigrants workers in that state and sector.
But it also estimated that increased immigrant labour might reduce salaries of immigrant workers already in the country by close to four percent and the wages of the least educated Malaysians by around three quarters of a percent.
The report also noted that “with slower growth and falling oil revenues, a focus on the quality of public expenditure will be an important priority for Malaysia”.