Malaysia profile

Demography and Health

Malaysia’s population in 2024 stands at about 35.56 million, indicating a sizable domestic market and labor force that support both domestic demand and export-oriented growth. The demographic profile shows a transition: the birth rate in 2023 was 12.4 per 1,000 people, while the crude death rate in 2023 was 5.16 per 1,000, pointing to an aging trend that will shape social spending, healthcare needs, and pension dynamics in the coming decades. Life expectancy at birth reached 76.7 years in 2023, reflecting improvements in health outcomes and living standards, while under-5 mortality registered at 8.1 per 1,000 live births in 2023, signaling continued progress in child health but room for further enhancements in maternal and pediatric care. The economy’s strength is reinforced by health financing indicators alongside a relatively low unemployment rate of 3.93% in 2022, suggesting a resilient labor market. Net migration in 2024 was positive by 174,770 people, illustrating continued attraction of Malaysia as a destination for skilled workers and students, with implications for future labor supply and social services. On poverty and nourishment, the poverty headcount stood at 6.2% in 2021 and the prevalence of undernourishment was 2.5% in 2022, signaling a modest but meaningful level of poverty and adequate food security by international standards. Health system capacity is supported by current health expenditure at 3.91% of GDP (2022) and domestic general government health expenditure per capita, PPP, of 648 international US$ (2022), alongside 2.32 physicians per 1,000 people (2021) and 2.01 hospital beds per 1,000 (2021), together indicating reasonable access to care, though ongoing investment will be needed to sustain progress as demographics shift. Together these indicators suggest a health system that is functional and improving, with rising demand for services and an opportunity to boost efficiency, equity, and outcomes through targeted investments and reforms.

Economy

Malaysia presents a diversified, export-driven economy with a solid income profile and relatively stable macro conditions. In 2024, GDP per capita stands at 11,867 current US dollars, while GDP per capita, PPP is 38,729 international dollars, reflecting a standard of living that is higher than many peers in the region when adjusted for purchasing power. The economy benefits from a highly integrated external sector: exports of goods and services accounted for 71.4% of GDP in 2024, and imports amounted to 66.0% of GDP, underscoring a deeply embedded participation in global value chains. The country ranks among the leading exporters of high-technology goods, with high-technology exports totaling about 127.0 billion USD in 2023 (rank 7 globally), indicating a strong electronics manufacturing base and sophisticated traded commodities that add resilience to export earnings. Inflation has remained modest at 1.83% in 2024, supporting consumer purchasing power and monetary stability. The external position shows a prudent balance, with the current account balance at 1.69% of GDP in 2024, signaling a modest surplus or balanced external accounts that reduce vulnerability to capital flow shocks. Foreign direct investment, net inflows, stood at 3.7% of GDP in 2024, reflecting continued investor confidence in Malaysia’s business climate, regulatory environment, and strategic location in Southeast Asia. These macro indicators together depict an economy with a robust manufacturing base, strong trade orientation, and a favorable, though competitive, investment climate that is shaped by global demand and regional dynamics. The economy also benefits from a growing knowledge economy, supported by a sizable pool of skilled labor and ongoing innovation activity, which helps sustain competitiveness as it navigates cyclical and structural shifts.

Trade and Investment

Malaysia is a highly open economy with a substantial reliance on trade and investment. Exports of goods and services account for 71.4% of GDP in 2024, while imports represent 66.0% of GDP, illustrating a deeply embedded role in global markets and a strong manufacturing base geared toward international buyers. The country’s push into high-technology exports has yielded a sizable external footprint: in 2023, high-technology exports reached approximately 127.0 billion USD, ranking Malaysia among the top global producers in advanced technology sectors. This performance underscores a broad industrial structure that includes electronics, communications equipment, and other tech-intensive goods, contributing to resilience against commodity price swings. The agricultural and resource sectors complement the tech-driven export profile, supporting a diversified export portfolio. The logistics backbone — critical for efficient trade — is evidenced by a Logistics Performance Index score of 3.6 in 2022, with a rank of 10 for quality of trade and transport-related infrastructure, indicating strong capabilities in customs, infrastructure, and logistics services that facilitate seamless cross-border flows. Foreign direct investment net inflows equal 3.7% of GDP in 2024, signaling continued confidence from global investors in Malaysia’s market access, governance, and growth potential. The current account balance at 1.69% of GDP in 2024 reinforces a stable external position, supported by a broad export base and steady import activity that sustain macro stability. Taken together, these indicators portray a country with a highly engaged economy that leverages open trade, advanced manufacturing, and competitive logistics to anchor growth and employment.

Governance and Institutions

Malaysia’s governance profile shows a blend of strengths and ongoing challenges. The World Bank’s governance indicators place high marks on Government Effectiveness (0.875 in 2023) and Regulatory Quality (0.661), signaling a capable administration and a regulatory environment conducive to business and investment. The Rule of Law stands at 0.572, indicating a functional legal system, though room remains to bolster judicial independence and enforceability of contracts. Control of Corruption is at 0.296 (2023), suggesting ongoing efforts to curb corruption and enhance governance, with scope for further improvement in transparency and accountability. Political Stability and Absence of Violence/Terrorism registers at 0.169 in 2023, which points to some vulnerabilities to political shocks or episodic tensions that can influence policy continuity and investor sentiment. These indicators collectively suggest that Malaysia maintains a relatively strong governance framework with effective public service delivery and a relatively enabling business climate, even as it navigates internal political dynamics and external security considerations. The combination of robust government effectiveness and regulatory quality provides a foundation for administering large-scale development programs, expanding digital governance, and maintaining investor confidence, while the lower political stability score indicates areas where policy continuity and social cohesion require ongoing attention to sustain long-term growth and social welfare outcomes.

Infrastructure and Technology

Malaysia has built a formidable digital and physical infrastructure supporting both domestic development and international trade. Internet penetration is exceptionally high, with 97.7% of the population using the Internet in 2023, enabling widespread digital services, e-government, and financial inclusion. The country also demonstrates a strong logistics and trade infrastructure, evidenced by a Logistics Performance Index of 3.6 (2022) and a rank of 10 in quality of trade and transport-related infrastructure, indicating efficient ports, roads, and logistics services that reduce transaction costs and time-to-market for exporters. The technology frontier is visible in the export mix and innovation indicators: high-technology exports reached about 127.0 billion USD in 2023, reinforcing Malaysia’s position as a leading hub for electronics and advanced manufacturing in the region; patent applications by residents totaled 883 in 2021, signaling ongoing activity in research and development and a growing culture of invention, albeit at a scale that leaves substantial room for expansion. Healthcare and human capital infrastructure also reflect deliberate public investment. The health system is supported by 2.01 hospital beds per 1,000 people (2021) and 2.32 physicians per 1,000 people (2021), alongside current health expenditure of 3.91% of GDP (2022) and 648 international dollars per capita in domestic government health expenditure (PPP, 2022). These metrics indicate a reasonably accessible mix of clinical facilities and professional capacity, with policy potential to deepen coverage, improve primary care access, and bend the curve toward higher life expectancy and better population health outcomes as the digital economy and manufacturing sectors continue to expand. Overall, Malaysia’s infrastructure and technology landscape positions it well for ongoing modernization, urban development, and integration into regional and global value chains.

Environment and Sustainability

Malaysia’s environmental indicators show a nuanced balance between development and sustainability pressures. Total greenhouse gas emissions per capita, excluding LULUCF, amount to about 9.26 t CO2e in 2023, reflecting the scale of industrial activity, energy use, and transport emissions that accompany a diversified economy. Renewable energy contributed about 7.5% of total final energy consumption in 2021, indicating progress in diversifying the energy mix but highlighting the need for deeper decarbonization, particularly in power generation and energy-intensive industry. Water resources show a level of withdrawal at about 3.44% of available freshwater resources, suggesting a relatively moderate use of water relative to resource availability, though sustainability planning must continue to address future demand growth and climate variability. Malaysia’s environmental strategy will likely emphasize expanding renewable capacity, improving energy efficiency across sectors, and strengthening watershed and water-management policies to ensure resilience against climate risks and urban water stress. The country’s climate policy will also need to align with regional commitments and global climate targets while sustaining growth, employment, and living standards. In sum, Malaysia’s environmental trajectory points to steady progress in decarbonization and sustainable resource management, coupled with challenges common to rapidly developing economies that aim to balance economic diversification, social development, and ecological protection.