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The conference "3rd National Economic Summit" was opened by the presentation of Dato' Sri Mustapa Mohamed, Minister of International Trade and Industry Malaysia. The Minister underlined the positive development and the impressive macro-economic data in the first three months of 2017 for the Malaysian economy.
The economy expanded by 5.6 percent year-on-year in the first quarter of 2017, compared to a modest growth of 4.2% in 2016. The World Bank has revised upwards its prediction for Malaysia's growth in 2017 - to 4.9%, while Citibank research is predicting 5.2% for 2017. Malaysia is continuing its efforts to boost domestic demands and reduce the economy's dependence on exports. So in the March quarter, private consumption grew by 6.6 percent year-on-year. Nevertheless, exports - particularly of electronics, oil and gas, palm oil, remain a significant driver of the economy. Gross exports of goods and services constitute more than 73.6% of GDP, with 15.8% of Malaysia's exports going to China, its main trading partner.
Unemployment stays by a low a 3.2%, while youth unemployment figures stay at worrying 10%.
Minister Dato`Sri Mustapa Mohamed regrets the withdrawal of the Trump administration from the 12-member Trans-Pacific Partnership Agreement (TPP)which was painfully negotiated over more than five years. The remaining 11 countries will discuss options at the TPP Ministers meeting in November of this year. Another option or regional corporation will be the Regional Comprehensive Economic Partnership (RCEP), which could start work by 2018. This is a grouping of 16 countries, with ASEAN as the main driver.
But there are also numerous challenges facing the Malaysian economy which were discussed during the various sessions of the conference. In the coming decade a new phase of industrialization will develop towards Industry 4.0 - e.g. knowledge-intensive services, digitalization, e-commerce - which will require a skilled workforce, and an increased production of knowledge as well as a growth of productivity. It will be necessary to attract new foreign investments, with a shift from the current labour intensive to knowledge- and skill-based investments.
Additional external risks which may dampen the economic success of Malaysia might come from the outside world - such as modest global growth due to sluggishness in the largest economies of the USA, China, EU and Japan plus economic uncertainties in huge emerging markets, particularly Russia, Brazil and Saudi Arabia. A negative influence could also be caused by low commodity prices, protectionist policies and other geopolitical risks.