Malaysia’s economy expanded by 3.3% in the third quarter of 2023, according to advance estimates by the Department of Statistics Malaysia, up from 2.9% in the second quarter. This growth is primarily driven by the services sector, notably in wholesale and retail trade, transportation and storage and business services. The construction sector saw modest growth, while agriculture rebounded slightly after a previous decline.
In the first half of 2023, Malaysia attracted a total of RM132.6 billion (US$27.8 billion) in approved investments across services, manufacturing and primary sectors, according to the Ministry of Investment, Trade and Industry. Domestic direct amounting to RM69.3 billion (US$14.5 billion). Foreign direct investments totaled RM63.3 billion (US$13.2 billion), with the largest inflows coming from Singapore, Japan, the Netherlands, China and British Virgin Islands. This is attributed to the government’s probusiness policies, strategic location in Asia, trusted ecosystem for supply chains and talent and growing innovation capabilities.
Toward a Greener, More Prosperous Future
In July, Prime Minister Anwar Ibrahim unveiled the Madani Economy Framework, a comprehensive roadmap geared to drive sustainable growth and enhance the overall well-being of the people. This initiative has come at a crucial time, serving as a strategic response to bolster Malaysia’s economy amidst a backdrop of a global economic slowdown and ongoing geopolitical uncertainties.
Central to Madani is the principle of sustainability, underscoring the importance of responsible progress in energy transition and sustainable development. Malaysia is on the path to achieving net zero emissions by 2050, as outlined in the National Energy Transition Roadmap. This transition involves shifting away from a traditional fossil fuel-based economy toward a high-value economy, aligning with the nation’s commitment to environmental stewardship and a greener, more prosperous, future.
PETRONAS, Malaysia’s national energy conglomerate, has aligned its business goals with the nation’s vision as well as global sustainability principles. In fact, carbon reduction has been its pursuit for a decade. Since 2013, PETRONAS has cumulatively reduced 18.1 million tonnes of carbon dioxide equivalent (MtCO2e) of greenhouse gas (GHG) emissions from the implementation of decarbonization activities throughout PETRONAS Group-wide operations.
Building on this momentum, the company has set its own pathway to net zero emissions by 2050 (NZCE2050 Pathway), with clear and solid short-, medium- and long-term targets. PETRONAS is racing to decarbonize to meet these targets, starting with aiming to cap GHG emissions at 49.5 MtCO2e by 2024, covering Scope 1 and Scope 2 emissions for its operations in Malaysia. Additionally, PETRONAS aims to enhance its role in energy transition by focusing on both energy security and the responsible delivery of energy solutions. “It is our commitment to deliver our ‘Amanah,’ or trust, to safeguard and manage the nation’s hydrocarbon resources responsibly for the people and the country,” says Datuk Bacho Pilong, Senior Vice President of Project Delivery and Technology, PETRONAS.
Digitalization Crucial to Economic Growth
The digital economy is another crucial pillar of economic growth under the Madani Economy Framework. It is one of the fastest growing sectors in Malaysia, representing 23.2% of the nation’s gross domestic product (GDP). Malaysia Digital Economy Corporation (MDEC), the nation’s lead digital economy agency, has been leading Malaysia toward becoming a globally competitive digital nation through the development and execution of the Malaysia Digital initiative, which aims to ensure that people, global companies and investors will conduct business in Malaysia.
“The idea of Malaysia Digital is to attract good, purposeful and contextual digital opportunities that will be strategic to Malaysia,” says Mahadhir Aziz, CEO of MDEC.
“Additionally, we aim to create local champions and drive the digitalization of Malaysian society, starting with businesses and eventually extending to individuals. This is the crux of Malaysia Digital—we are here to do business, so we invite global giants to invest in Malaysia.”
One remarkable tech champion leading the charge is Silverlake Axis, an enterprise technology, software and services company that has been intensifying its efforts toward developing innovative financial solutions to facilitate the digitalization journey of the financial services sector.
With the ongoing disruption caused by next-generation technologies, such as cloud computing, artificial intelligence, big data and machine learning, Silverlake Axis has expanded its capabilities and expertise to better serve its clients and secure a competitive advantage in the ever-evolving landscape. The company has a strong presence in Southeast Asia and serves 40% of the top 20 largest banks in the region.
Innovation Increases Global Competitiveness
Meanwhile, innovation remains a priority as Malaysia strives to compete on the global stage. The nation is committed to intensifying its efforts in nurturing local innovation and technological advancements, with the overarching goal of establishing itself as a formidable global contender.
BookDoc, a local healthtech startup, has innovation at its core. Initially established to help individuals find healthcare providers, the company has evolved into a prominent player in the area of corporate wellness programs. These programs cover physical wellness, mental wellness, nutrition and teleconsultations. What’s different about such programs is the use of smart technology to gamify healthy behavior while incentivizing individuals through personalized rewards schemes—all through its superapp.
Over the years, BookDoc’s corporate wellness program has gained significant traction, finding adoption among large multinational corporations. With the corporate wellness solutions market projected to reach US$94.6 billion by 2026, there are plenty of opportunities for BookDoc to seize.
All this bodes well for the overall economy. As Malaysia aims to become one of the world’s top 30 largest economies in the next decade, the implementation of the new economic reforms will bring it closer to achieving this goal.