Kuala Lumpur (VNA) – Malaysia is projected to attain high-income status between 2028 and 2030, according to the OECD Economic Survey of Malaysia released by the Organisation for Economic Co-operation and Development (OECD) released on July 28.
The report painted a picture of Malaysia's resilient economic growth despite global uncertainties. Its gross domestic product (GDP) is forecast to expand by 4.9% in 2026 and 5% in 2027. Inflation is projected to rise to 2.1% in 2026 and 2.3% in 2027, driven by higher wages and energy prices, while unemployment is expected to decline further to a healthy 2.9% in 2026.
Meanwhile, the fiscal deficit is forecast to narrow gradually from 4.3% of GDP in 2025 to 4% in 2026 and 3.8% in 2027.
To sustain long-term growth, avoid the middle-income trap and address population ageing, the OECD urged Malaysia to press ahead with structural reforms. It recommended reintroducing the Goods and Services Tax (GST), gradually replacing broad fuel subsidies with targeted cash transfers, and prioritising academic merit in public university admissions while expanding investment in free early childhood education.
The report also called for better management of the rapid expansion of data centres, warning that they generate relatively few jobs while placing growing pressure on electricity and water supplies, underscoring the need to accelerate renewable energy development.
In addition, the OECD recommended improving transparency and governance in government-linked companies (GLCs) by limiting politically motivated board appointments and adopting its guidelines on corporate governance of State-owned enterprises to enhance productivity and accountability.
Speaking at the report's launch, Malaysian Economy Minister Haji Akmal Mohd Nasir said the country is now only 7.1% below the World Bank's high-income threshold.
Malaysia's gross national income (GNI) per capita reached 57,200 MYR (13,351 USD) in 2025, compared with the World Bank's high-income benchmark of 14,375 USD. The country has maintained its 2026 economic growth target of 4-5%.
The minister said the government remains committed to ensuring that economic growth translates into higher productivity, better-quality jobs and rising incomes for the people.
He added that the OECD report would serve as an important reference for implementing Malaysia's 13th Five-Year Plan (2026-2030) and accelerating the country's structural economic reforms./.
