PUTRAJAYA, July 28 — Malaysia is now just 7.1 per cent below the World Bank’s high-income threshold, thanks to the 5.8 per cent economic expansion in the second quarter of this year, said Economy Minister Akmal Nasrullah Mohd Nasir.
The government will ensure that this momentum translates into higher productivity, quality jobs, and rising incomes for Malaysians.
“The economy grew by 5.8 per cent, inflation remained contained at 1.9 per cent, and unemployment stood at 3.0 per cent. Malaysia is now just 7.1 per cent below the high-income threshold.
“These are encouraging numbers, but crossing that threshold is not an end in itself. What matters is whether growth delivers better wages, more quality jobs, and stronger purchasing power for Malaysians,” he said during the launch of the 'OECD Economic Surveys: Malaysia 2026' today.
Akmal added that the independent, evidence-based report will serve as an important reference for strengthening the implementation of the 13th Malaysia Plan (13MP) 2026-2030 and accelerating the country’s structural economic reforms.
In 2025, Malaysia’s gross national income per capita rose to RM57,200, or about US$13,351, against the World Bank’s high-income threshold of US$14,375.
He said the government is maintaining its full-year growth target of between four and five per cent for 2026, supported by domestic demand, private investment, exports, and technology-intensive sectors, including semiconductors and data centres.
The 'OECD Economic Surveys: Malaysia 2026' also identified ensuring investments in education and training lead to higher productivity and incomes as a key structural challenge, as 35.6 per cent of tertiary-educated workers remain in skill-related underemployment.
Akmal noted that under the 13MP, the government will strengthen the alignment of curricula with industry needs and expand technical and vocational education and training, Academy in Industry, and upskilling programmes in semiconductors, artificial intelligence, and the digital economy.
“When 35.6 per cent of tertiary-educated workers remain in jobs below their skill level, we cannot measure success by graduate numbers alone. Education and training must lead to high-value jobs, stronger productivity, and wages that reflect workers’ skills,” he said.
Meanwhile, the federal fiscal deficit narrowed from 5.5 per cent of gross domestic product in 2022 to 3.7 per cent in 2025.
The government remains committed to reducing the deficit to three per cent or lower by 2030 through better-targeted assistance and reduced leakages while safeguarding vulnerable groups.
“We have reduced the deficit from 5.5 per cent to 3.7 per cent and are targeting 3 per cent or lower by 2030. Fiscal consolidation is not about withdrawing support from the people; it is about ensuring that every ringgit is used more effectively for education, healthcare and infrastructure,” Akmal said.
To strengthen productivity, the Government Service Efficiency Commitment Act 2025 (the Iltizam Act) sets a target of reducing unnecessary regulatory burdens by 25 per cent over three years.
The minister said that via the Special Task Force to Facilitate Business (Pemudah), the Economy Ministry will identify high-impact business approvals for end-to-end review, with clearer service standards, more predictable decisions and stronger accountability for delays.
The OECD Economic Surveys: Malaysia 2026, the fifth OECD Economic Survey of Malaysia since 2016, features a thematic chapter on improving skills, education and training.
Its findings will help inform the implementation of the 13MP in key areas, including productivity, education, skills development, digitalisation, and climate resilience.
