SHAH ALAM, Jan 1 — Selangor is on track to reaching the RM500 billion economy milestone, with the achievement now expected, according to Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid.
He said the projection was supported by the state’s average growth rate of 7.3 per cent from 2021 to 2024, surpassing the 6.5 to 7 per cent target outlined in the First Selangor Plan (RS-1).
“If that trajectory can be sustained, I think it’s a matter of time (before Selangor surpasses RM500 billion in economic activity).
“I believe it can be achieved in the next two to three years,” he said during Media Selangor’s Lunch on Us! programme, aired on Monday.
However, Afzanizam said this is barring any unforeseen circumstances, including a potential recession in the United States that could disrupt growth momentum, especially considering Malaysia’s status as an open economy.
“One of the key members of the US Federal Open Market Committee (FOMC), Stephen Miran, mentioned the possibility of recession in the US economy.
“If that happens, it can put a stumbling block in terms of how quickly Selangor can transition towards that number.”
Last year, Selangor contributed a record RM432.1 billion to the national gross domestic product (GDP), accounting for 26.2 per cent of the national economy. This marked an increase from 25.9 per cent in 2023, when the state contributed RM406.1 billion.
Previously, in January, Menteri Besar Dato’ Seri Amirudin Shari said Selangor is on track to achieve a RM500 billion economy within the next three to five years, driven by advancements in complex industries such as semiconductors and ventures into artificial intelligence (AI).
Afzanizam said Selangor, as the heart of the Malaysian economy and supported by key drivers such as ports and aviation, is expected to continue growing in the coming years.
Given Selangor’s concentration of major industries, he noted the state should record stronger productivity gains to support sustained growth.
“Typically, GDP growth comes from labour, capital and, more importantly, technology, which is captured through total factor productivity (TFP),” he said, adding that Selangor is well positioned to improve its TFP.
Afzanizam added that growth must also be inclusive, pointing to the Gini coefficient as a key indicator.
“Selangor’s Gini coefficient is still close to the national level at around 0.39, but it is trending down, which means the income gap is narrowing. That’s good, but more work needs to be done.”
