Malaysia could reach high-income status by 2028, World Bank says | Business and Economy

Southeast Asian economy on track to reach milestone within four years after 2024 growth forecast raised to 4.9 percent.

Malaysia could reach high-income nation status as early as 2028 amid better-than-expected economic growth and a strengthening currency, a top World Bank economist has said.

Malaysia is on track to hit the milestone after the Washington, DC-based lender raised the country’s 2024 growth forecast from 4.3 percent to 4.9 percent, Apurva Sanghi, lead economist for Malaysia, said on Thursday.

Higher growth is translating to better living standards, which, paired with a stronger ringgit, have put higher-income status “within reach”, Apurva said.

Malaysia’s economy is 12 percent larger than before the COVID-19 pandemic, putting it ahead of every Southeast Asian country apart from Singapore, Apurva added.

“This also means M’sia could reach high-income status as early as 2028 – assuming continuing reforms – and luck,” Apurva wrote in a post on X.

Apurva called on the government to focus on reforms to ensure progress, including unwinding fuel subsidies and tackling the underemployment of some 2 million Malaysians working in jobs for which they are overqualified.

“In summary, yes, the economy is currently in a good place,” he said.

“But it can be in an even better place if we tackled the under-employment issue that affects the hearts, minds, morale of millions of young, aspiring Malaysians.”

Malaysia’s economy grew 3.7 percent in 2023, after an 8.7 percent expansion the previous year.

The World Bank defines high-income countries as those with a gross national income per capita of $14,005 or higher.