Malaysia's Nominal GDP for 2023 Amounts to RM1.8 trillion

Malaysia’s 2023 nominal gross domestic product (GDP) amounted to RM1.8 trillion, said the Department of Statistics Malaysia (DOSM).

Growth moderated to 1.6 per cent from the double-digit 15.9 per cent in 2022.

In a statement, chief statistician Datuk Seri Dr Mohd Uzir Mahidin said that despite the moderated performance, the economy remained resilient, particularly through private final consumption expenditure, which increased 6.7 per cent.

"The growth was propelled by ongoing enhancement in employment and wage through the implementation of a new minimum wage of RM1,500 starting May 2023,” he said.

DOSM today released the statistics for Malaysia’s Gross Domestic Product (GDP) Income Approach for 2023.

The income statistics from economic production include three key components, namely compensation of employees (CE), gross operating surplus (GOS) and taxes less subsidies on production and imports (net taxes).

Given the improvements in the labour market, Mohd Uzir said CE recorded a steady growth of 4.2 per cent while GOS declined by 1.8 per cent, while the performance of the income distribution showed a shift towards a better share of CE at 33.1 per cent compared to 32.3 per cent in 2022.

"Nevertheless, GOS still contributed substantially to the GDP at 64.8 per cent, although 2.3 per cent lower than the previous year. The remaining component was net taxes, which accounted for 2.1 per cent,” he said.

Looking at detailed sectoral performance, he said the increase in the CE component, encompassing the remuneration received by employees for their labour, was driven by the services, manufacturing and construction sectors.

"CE in the Services sector grew 4.3 per cent, supported by growth in all sub-sectors, particularly wholesale and retail trade, food and beverages and accommodation. As for the manufacturing sector, CE registered 3.3 per cent growth, led by the moderation in electrical, electronic and optical products,” he said.

Mohd Uzir added that the decline in GOS was primarily influenced by the sharp downturn in the mining and quarrying (-12.1 per cent), agriculture (-13.2 per cent) and manufacturing (-5.6 per cent) sectors.

"The fall of commodity prices in 2023 has lowered profitability across these sectors, leading to a marked decrease in overall GOS. Nevertheless, the contraction was partially alleviated by the growth in the services and construction sectors at 5.3 and 1.3 per cent, respectively,” he said.

Net taxes, a component which represents the source of income for the government, showed a remarkable growth of 242 per cent or RM37.7 billion in 2023, attributed to the higher taxation revenue as compared to a decrease in subsidies.

In the context of international comparison, Mohd Uzir said the composition of CE in the South East Asia region is notably lower, accounting for less than 40 per cent of GDP, while GOS makes up a larger share.

"As opposed to advanced economies such as the United States, Germany and Canada, CE constitutes a greater share than GOS at 53.1 per cent, 52.4 per cent and 51.1 per cent, respectively.

"Net taxes formed a smaller share of GDP in the selected countries, with Malaysia recording the lowest contribution of 2.1 per cent, reflecting the differences of fiscal policy among countries,” he said.