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11th Malaysia Plan Economic highlights

[ 24-05-2015 ]
11th Malaysia Plan Economic highlights
Prime Minister Datuk Seri Najib Tun Abdul Razak tabling the 11th Malaysia Plan 2016-2020 at the Parliament.  Deputy Prime Minister Datuk Seri Muhyiddin Yassin is on the left listening.- AZMAN GHANI / The Star

Prime Minister Datuk Seri Najib Tun Abdul Razak tabling the 11th Malaysia Plan 2016-2020 at the Parliament. Deputy Prime Minister Datuk Seri Muhyiddin Yassin is on the left listening.- AZMAN GHANI / The Star

* Malaysia’s economy to expand 5%-6% a year based on sustained domestic demand and increasing contribution from the external sector. 

* Private consumption and investment to drive growth, resulting in a 7.9% per annum rise in gross national income (GNI) per capita.
* Four strategies to boost economic fundamentals: 1) Unlocking the potential of productivity to ensure sustainable and inclusive growth; 2) Promoting investment to spearhead economic growth; 3) Increasing exports to improve trade balance; 4) Enhancing fiscal flexibility to ensure sustainable fiscal position.
* Real private consumption is expected to increase at an average rate of 6.4% per annum.
* Public investment to grow at 2.7% per annum, or an annual average of RM131bil in current prices, driven by the Federal Government development expenditure and capital spending of non-financial public enterprises (NFPEs).
* Private investment is expected to grow at 9.4% per annum, with an estimated average annual investment of RM291bil in current prices.
* Productivity GDP growth underpinned by significant increases in productivity, with less dependence on inputs from capital and labour. Contribution of multi-factor productivity to GDP growth is targeted to increase to 40%, while that of capital is expected to reduce to 44% and labour to 16%

Federal Government financial position:
* Federal Government revenue to increase from RM1.050 trillion in 10MP to RM1.408 trillion in 11MP.
* GST to bring in average of RM31.4bil revenue per year over the next five years compared to an average of RM15.5bil collected through the sales tax and services tax during the Tenth Plan, which will strengthen the fiscal position. 
* Review of dividends received from Government-linked companies and undertaking greater joint audit efforts by the Inland Revenue Board and the Royal Malaysian Customs Department. 
* Revenue is targeted to expand by 7.9% per annum and the dependence on oil-related revenue to decline to 15.5% by 2020 from 21.5% in 2015.
* Operating expenditure to increase from RM1.031 trillion in 10MP to RM1.289 trillion
*Development expenditure to increase from RM223.6bil to RM260bil -- half of the amount for infrastructure. Focus will be on the economic and social sectors.
* Federal Government to reduce fiscal deficit from 3.2% to 0.6% by 2020.
* Federal Government total debt to be reduced from 53.3% of GDP to 43.5% by 2020.
* Current account balance of the balance of payments to remain in surplus and record RM46.5bil or 2.6% of GNI by 2020.

Equity ownership:
* Bumiputera individual equity ownership will be expanded by allowing withdrawal from Account 1 of the Employee Provident Fund to purchase ASB2 units, which provide competitive long-term returns at minimal risk. 
* New funding mechanisms, such as waqf investment fund and private equity for investment will be created through crowd funding to invest in profitable and high potential companies.

Inflation and labour market:
* Accommodative monetary policy and administrative measures will continue to ensure price stability. Inflation during 11MP to remain low, averaging 2.5% to 3% per annum.
* Economy to maintain full employment with an estimated unemployment rate of 2.8% by 2020. 
* Employment to grow at a slower rate of 2.1% per annum to reach 15.3 million by 2020, with additional 1.5 million jobs created.
* Inflation to remain low, averaging 2.5% and 3% per annum.
* Labour productivity to increase from RM77,100 in 2015 to RM92,300 in 2020
* GNI per capita to reach RM54,100 (US$15,690) in 2020
* Average monthly household income to increase from RM6,141 in 2014 to RM10,540 in 2020
* Share of compensation of employees to GDP to increase from 34.9% in 2015 to at least 40% in 2020
* Malaysian Wellbeing Index to increase by 1.7% per annum, an indicator of improvement in the well-being of the rakyat.