Malaysia’s per capita income is expected to increase one third by 2020 on the back of its strong growth, said the Institute of Chartered Accountants in England and Wales’ (ICAEW) quarterly Economic Insight Report.
However, the report noted that the high population growth in Malaysia was likely to hinder higher per capita income growth rate.
In a statement today, ICAEW said gross domestic product per capita rates across the region were expected to grow over the course of the present decade.
“The wide discrepancies in living standards between Asean nations will likely increase with the difference in annual GDP per capita between a Singaporean and an average Asean citizen growing from almost $42,000 to nearly $54,000,” it said.
It said unlike the eurozone, US and Japan, Asean countries had a relatively low debt/GDP ratio as well as a largely stable or declining outlook with Malaysia’s debt ratio at 55 per cent and expected to increase slightly.
Regional director of ICAEW South-East Asia, Mark Billington, said emerging markets were affected by low Western demand and the eurozone uncertainty remained a headache for the world economy.
He said Malaysian businesses needed to make sure they acted on the lessons learnt from the previous downturn and focused on sound financial management, while looking for new opportunities in other markets.
However, the report Malaysia’s GDP growth for this year was estimated at 3.8 per cent due to the effects of falling commodity prices and a challenging global environment for the country’s important electronics sector.
“This may dampen an otherwise solid domestic demand for goods and services, though the introduction of a value-added tax and the reduction of government subsidies may also adversely affect demand,” it said.
The report, Economic Insight: Southeast Asia, is produced by ICAEW’s economic partner, The Centre for Economics and Business Research.
The report is a quarterly review of Southeast Asian economies focussing on the six largest countries – Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.