Overview

MALAYSIA’S ECONOMIC PERFORMANCE, 2022

Malaysia’s economy showcased resilience in 2022, defying the gloomy global economic climate. The pent-up global demand for electrical and electronics (E&E) products, particularly semiconductors, integrated circuits and parts, as well as commodity-based products and diverse export products, continues to aid the country's export growth. The continued improvement in the job market, post-pandemic expansion of digital frontier and increased tourism activity further contributed to the optimistic outlook for the economy in 2022. Additionally, the government’s strategic policies, including the implementation of a higher minimum wage and the provision of cash assistance, have increased consumer purchasing power and thus, infused higher domestic demand.

Malaysia's economy was vibrant in 2022, soaring 8.7 per cent from a modest 3.3 per cent in the previous year, marking its best performance since the year 2000 (Chart 1). This remarkable performance was supported by positive growth across all kinds of economic activities, led by the Services sector, which accelerated by 10.9 per cent (2021: 2.2%). This was followed by the Manufacturing sector, which chalked up 8.1 per cent (2021: 9.5%) and the Construction sector, which grew by 5.0 per cent (2021: -5.1%). Notably, both the Services and Manufacturing sectors have surpassed the pre-pandemic levels recorded in 2019. Aside from that, the Mining & quarrying and the Agriculture sectors increased by 2.6 per cent (2021: 0.9%) and 0.1 per cent (2021: -0.1%), respectively. 

The Services sector, constituting a substantial 58.3 per cent (Chart 2) of Malaysia’s economy, witnessed an impressive double-digit growth of 10.9 per cent in 2022, up from the previous year's 2.2 per cent. The expansion can be attributed to tourism-oriented subsectors, including the Wholesale & retail trade, Transportation & storage, Food & beverage and accommodation. Selangor and W.P. Kuala Lumpur emerged as the primary contributors, with respective growth rates of 13.6 per cent (2021: 2.5%) and 10.7 per cent (2021: 1.8%).

The Manufacturing sector, which accounted for 24.1 per cent of the national GDP, experienced a slight moderation to 8.1 per cent from 9.5 per cent in 2021. The solid performance in the Manufacturing sector was aided by rises in major subsectors, primarily Electrical, electronic and optical products at 14.2 per cent (2021: 14.6%) and Transport equipment, other manufacturing and repair subsector at 14.3 per cent (2021: 1.4%). The global semiconductor market has been thriving in recent years, yielding advancement in the Manufacturing sector, particularly in Selangor (9.0%) and Pulau Pinang (15.9%). 

The Agriculture sector registered marginal growth of 0.1 per cent, in contrast to a dip of 0.1 per cent in 2021. The Livestock subsector grew by 0.1 per cent and the Fisheries subsector expanded by 2.5 per cent, compensating the marginal decline of 0.1 per cent in the Crops subsector. The states that supported the recovery in this sector were Pahang, with a growth of 4.9 per cent, followed by Johor (1.9%) and Sarawak (0.7%).

Malaysia’s Mining & quarrying sector demonstrated favourable growth of 2.6 per cent (2021: 0.9%), buoyed by the Natural gas subsector, which accounted for 54.1 per cent of the sector. This subsector rose by 5.9 per cent, predominantly due to an increase in natural gas production in Sarawak.

The Construction sector experienced a positive upturn of 5.0 per cent following a decline of 5.1 per cent in the previous year. The recovery was primarily driven by robust growth in the Non-residential building segment, which expanded by 12.2 per cent, as well as the Specialised construction activities, 9.7 per cent. The Construction sector’s performance was aided by Selangor (4.1%) and W.P. Kuala Lumpur (2.0%).

STATE ECONOMIC PERFORMANCE, 2022

Johor recorded a value added of RM142.1 billion in 2022 (2021: RM131.3 billion), representing an 8.2 per cent increase over the previous year's 2.5 per cent (Chart 3). The Services sector surged by 10.8 per cent (2021: 2.9%) due to gains in the Wholesale & retail trade, accommodation and food & beverages and Utilities, transport and ICT subsectors. Similarly, the Manufacturing sector grew by 5.5 per cent, with increases in Electrical, electronic & optical products as well as Wood products, furniture, paper products and printing. The Construction sector experienced significant growth, expanding by 15.9 per cent (2021: -18.0%), owing to double-digit growth in the Civil engineering subsector. Meanwhile, the Agriculture sector increased by 1.9 per cent (2021: 0.7%) due to an upturn in Crops (oil palm).

Kedah’s economy increased by 7.2 per cent in 2022, surpassing the previous year's growth rate of 3.2 per cent. The value added reached RM50.9 billion, a rise from RM47.5 billion in 2021. The Services sector advanced by 8.1 per cent (2021: 2.0%), with notable contributions from Wholesale & retail trade, accommodation and food & beverages and Utilities, transport and ICT subsectors. The Manufacturing sector, a key industry in Kedah, rose by 8.1 per cent, outpacing the previous year’s 6.2 per cent, primarily attributed to increases in Electrical, electronic & optical products and Wood products, furniture, paper products and printing. Meanwhile, the Construction sector flourished with an 18.3 per cent increase (2021: -8.4%), primarily driven by the Non-residential building subsector. The Agriculture sector, on the other hand, dropped by 0.9 per cent, influenced by a decline in Crops (rubber and paddy).

The performance of Kelantan improved by 4.3 per cent (2021: 2.4%), with a value added of RM26.9 billion, compared to RM25.8 billion in 2021. The Services sector increased by 6.8 per cent (2021: 2.8%), aided by Wholesale & retail trade, accommodation and food & beverages and Government services subsectors. The Construction sector accelerated by 19.7 per cent (2021: 1.2%), largely supported by the Civil engineering subsector. In the meantime, the Manufacturing sector grew by 3.1 per cent (2021: 2.1%), attributed to increases in Electrical, electronic & optical products. The Agriculture sector, on the other hand, contracted by 4.9 per cent, from 1.2 per cent in 2021, stemming from a decline in Crops, particularly paddy and fruit.

Melaka’s GDP rose by 8.6 per cent, to reach RM45.5 billion from RM41.9 billion the previous year. The Services sector exhibited a robust expansion of 12.2 per cent, up from 2.6 per cent in 2021. Among the major contributors to the growth were the Wholesale & retail trade, accommodation and food & beverages and Utilities, transport and ICT subsectors. The Manufacturing sector climbed by 6.8 per cent (2021: 3.3%), driven by Transport equipment, other manufacturing and repair and Electrical, electronic & optical products. On the contrary, the Agriculture sector fell by 0.7 per cent (2021: -0.6%), influenced by the decline in Crops (rubber) and livestock subsectors.

Negeri Sembilan registered a value added of RM50.8 billion in 2022 (2021: RM47.8 billion), reflecting a 6.4 per cent growth from the 3.1 per cent in the previous year, driven by the Services and Manufacturing sectors. The Services sector grew by 7.6 per cent (2021: 2.2%), led by the Wholesale & retail trade, accommodation and food & beverages and Utilities, transport and ICT subsectors. The Manufacturing sector surged by 8.0 per cent (2021: 7.2%), owing to strong growth in Electrical, electronic & optical products and Petroleum, chemical, rubber and plastic products.

Pahang's economy witnessed a remarkable expansion, with its valuation reaching RM61.4 billion in 2022, up from RM 55.4 billion in the previous year. This equates to double-digit growth of 10.8 per cent (2021: 0.9%), surpassing Malaysia’s 8.7 per cent growth. The Services sector rose by 16.8 per cent (2021: -1.3 per cent), owing to the tourism-related subsectors, including Wholesale & retail trade, accommodation and food & beverages and Other services. The Manufacturing sector expanded by 5.8 per cent (2021: 6.1%), buoyed by the Transport equipment, other manufacturing and repair subsector. The Agriculture sector rebounded by 4.9 per cent (2021: -0.01%), supported by Crops (oil palm) and Fisheries activities.

Pulau Pinang continued to uphold its position as the fastest-growing economy in Malaysia, exhibiting robust growth of 13.1 per cent (2021: 6.9%). The economy has exceeded the milestone of RM100 billion, achieving RM112.1 billion (2021: RM99.1 billion). Unlike other states, Pulau Pinang was led by the Manufacturing sector, which grew by 15.9 per cent (2021: 12.4%), supported by the Electrical, electronic, and optical products subsector. Concurrently, the Services sector increased by 11.3 per cent (2021: 2.4%), driven by the Wholesale & retail trade, accommodation and food & beverages and Utilities, transport and ICT subsectors.

The economy of Perak surged by 4.3 per cent, compared to 3.6 per cent in the previous year. The Services sector rose by 7.2 per cent (2021: 2.6%), led by the Wholesale & retail trade, accommodation and food & beverages and Utilities, transport and ICT subsectors. The Manufacturing sector increased by 1.0 per cent (2021: 9.2%), with the Electrical, electronic and optical products subsector compensating for the downturn in Petroleum, chemical, rubber and plastic products. On the contrary, the Agriculture sector declined by 3.9 per cent, influenced by declines in Crops (oil palm), Livestock and Fisheries activities.

The GDP of Perlis expanded by 5.7 per cent in 2022 (2021: 1.4%), registering a value added of RM6.2 billion compared to RM5.9 billion in the previous year. The Services sector flourished by 5.7 per cent (2021: 2.2%), supported by the Wholesale & retail trade, accommodation and food & beverages and Government services subsectors. The Agriculture sector rose by 2.2 per cent (2021: -5.9%), fueled by advancements in Fisheries and Livestock subsectors. The Manufacturing sector grew by 4.5 per cent (2021: 5.4%), driven by the Vegetable and animal oils & fats and food processing.

Selangor remained the largest economy in Malaysia, with a value added of RM384.9 billion (2021: RM344.0 billion). Its performance has been exceptional in 2022, growing 11.9 per cent, up from 5.3 per cent in the previous year. The Services sector grew by 13.6 per cent (2021: 2.5%), backed by the Wholesale & retail trade, accommodation and food & beverages and Utilities, transport and ICT subsectors. The Manufacturing sector expanded by 9.0 per cent (2021: 13.1%), aided by Electrical, electronic & optical products and Transport equipment, other manufacturing and repair. Likewise, the Construction sector surged by 4.1 per cent (2021: -6.3%), owing to the Non-residential building and Specialised construction activities subsectors.

Terengganu recorded RM37.3 billion in GDP, a 5.9 per cent upturn compared to 3.7 per cent in 2021. The Services sector grew by 6.0 per cent (2021: 1.4%), buoyed by the Wholesale & retail trade, accommodation and food & beverages and Government services subsectors. Next, the Manufacturing sector moderated to 8.2 per cent from 9.5 per cent in 2021, backed by the Petroleum, chemical, rubber & plastic products. However, the Agriculture sector in Terengganu dropped by 4.7 per cent (2021: -5.2%) due to the decline in Crops (oil palm and other crops) and Livestock subsector.

In 2022, Sabah’s GDP rose by 3.7 per cent compared to 1.5 per cent in the previous year, to record a value added of RM81.9 billion (2021: RM79.0 billion). The Services sector expanded by 8.6 per cent (2021: 2.1%), led by the tourism-oriented subsectors, which include Wholesale & retail trade, accommodation and food & beverages and Utilities, transport and ICT. However, the Mining & quarrying sector dropped by 1.3 per (2021: 3.2%), due to a fall in the Crude petroleum and condensate subsector. The Agriculture sector fell by 0.2 per cent (2021: -2.2%), owing to a contraction in the Crops subsector, primarily oil palm activity.

Sarawak's GDP grew by 6.5 per cent (2021: 3.1%) with an economic value of RM140.2 billion (2021: RM131.6 billion). The Services sector expanded by 9.6 per cent (2021: 2.4%), led by the Utilities, transport and ICT and Wholesale & retail trade, accommodation and food & beverages subsectors. The Manufacturing sector rose by 5.6 per cent (2021: 11.1%), driven by the Petroleum, chemical, rubber and plastics products. The Mining and quarrying sector expanded by 5.7 per cent (2021: -2.5%) following increases in Natural gas production. Similarly, the Agriculture sector increased by 0.7 per cent (2021: -3.2%), supported by Crops subsector (oil palm).

W.P. Kuala Lumpur stood as Malaysia’s second-largest economy, with an RM239.8 billion value added, grew 9.2 per cent compared to 1.0 per cent in 2021. Its economy was dominated by the Services sector, which expanded by 10.7 per cent (2021: 1.8%), underpinned by the Wholesale & retail trade, accommodation and food & beverages and Finance, insurance, real estate & business services subsectors. Meanwhile, the Construction sector rebounded by 2.0 per cent (2021: -11.9%), largely due to increases in the Specialised construction activities and Non-residential building subsectors. 

W.P. Labuan recorded a growth of 4.0 per cent compared to a marginal 0.5 per cent in the previous year, recording a value added of RM8.0 billion. The Services sector expanded by 4.6 per cent (2021: 1.5%), supported by growth in Finance, insurance, real estate & business services as well as Wholesale & retail trade, accommodation and food & beverages subsectors. Concurrently, the Manufacturing sector surged by 1.7 per cent (2021: -1.0%), backed by the Non-metallic mineral products, basic metal and fabricated metal products.

GDP PER CAPITA BY STATE, 2022

All thirteen states and two federal territories reported an increase in their GDP per capita performance compared to the previous year. Five states exceeded national GDP per capita (RM54,785), which were W.P. Kuala Lumpur (RM126,423), W.P. Labuan (RM85,522), Sarawak (RM80,772), Pulau Pinang (RM69,591) and Selangor (RM59,804) (Table 1).

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