1 ECONOMIC MANAGEMENT AND PROSPECTS

1 1 ECONOMIC MANAGEMENT . AND PROSPECTS . Overview Performance Review 2017. Information Box - National Transformation 2050. Updates on the 2017 Budget Information Box - MyBeautiful New Home Information Box - Digital Free Trade Zone Feature Article - Enhancing Mobility through Rail Connectivity Feature Article - The Sharing Economy: Driving ECONOMIC and Social Empowerment through Digital Platforms Information Box - Coding@Schools ECONOMIC MANAGEMENT 2018. Strategic Initiatives 2018 Budget PROSPECTS for 2018. Chapter 1 10/20/17 9:43 PM.

2 Chapter 2 10/20/17 9:43 PM. ECONOMIC REPORT 2017/18 3. 1 ECONOMIC MANAGEMENT AND. PROSPECTS . Overview environment for the youth to emerge as well- balanced citizens. Finally, the Social Transformation R ising above expectations, malaysia leveraged Programme (STP) continues to strengthen core values, its strong ECONOMIC fundamentals to record work culture and attitudes among Malaysians. In a robust growth in the first six months of 2017. addition, the establishment of the Cultural Economy Despite increasing protectionist threats, policy Development Agency (Cendana) on 6 September uncertainties in developed countries and geopolitical 2017 will further promote a sustainable, inclusive, tensions, the domestic economy expanded vibrant and ambitious cultural economy.

3 During the period. The expansion is a testament to the Government's concerted efforts in implementing In tandem with the NTP, the 2017 Budget introduced various reforms under the National Transformation various programmes to enhance ECONOMIC growth. Policy (NTP). The NTP, comprising several high- Furthermore, efforts were intensified to strengthen impact and innovative programmes, was introduced human capital, improve the education system in 2009 to uplift the economy from the middle- and create ample opportunities for the rakyat to income trap towards a high-income and advanced increase their income.

4 At the same time, several nation by 2020. initiatives to enhance public service delivery were implemented to ensure the best outcomes for the Towards uniting all Malaysians, the 1 malaysia , rakyat. Collectively, these efforts have strengthened People First, Performance Now principle is the the nation's ECONOMIC fundamentals. Given these overarching paradigm that permeates across all developments, the economy is expected to grow development plans and programmes, benefitting all between in 2017. With more pro- segments of the society.

5 Through the Government growth and rakyat-centric programmes and projects Transformation Programme (GTP), public service in the 2018 Budget, the economy will remain delivery was strengthened to facilitate businesses on its growth trajectory, expanding between 5%. and enhance the wellbeing of the rakyat. Meanwhile, in 2018. Moving forward, the National the ECONOMIC Transformation Programme (ETP) Transformation 2050 (TN50), introduced in the enabled the private sector to undertake several 2017 Budget, aspires to elevate malaysia as among high-impact projects which in turn, increased the top 20 nations, ranked by ECONOMIC and social private investment in the economy.

6 Development, in 2050. Amid threats of global terrorism, the Political Transformation Programme (PTP) ensued stability Performance Review 2017. in the country by balancing the nation's security needs and individual freedom. Furthermore, to The Global Economy leverage digital technology, an essential enabler for the country's transformation, the Digital The global economy is expected to expand Transformation Programme (DTP) continues to in 2017 (2016: ). The expansion is attributed create an ecosystem which promotes the pervasive to the improved growth of (2016: ) in use of digital technology in all aspects of the advanced economies and (2016: ) in economy.

7 Meanwhile, the Community Transformation the emerging market and developing economies. Programme (CTP) reached out to the rakyat and Among the advanced countries, the US and the enabled all communities to benefit fully from the euro area are projected to record higher growth urban and rural transformation centres. At the driven by steady expansion in investment and same time, the Fiscal Transformation Programme consumption activities. Japan is anticipated to record (FTP), further strengthened Government finances a stronger-than-expected growth contributed by and supported macroeconomic stability.

8 Higher investment and robust exports. Meanwhile, the UK's economy is forecast to sustain growth To meet the current and future needs of the industry, amid slower consumer spending following post- the Vocational and Technical Transformation Brexit uncertainties. Programme (VTTP) was introduced to revamp the technical and vocational education and training Growth in the emerging market and developing programmes. At the same time, the National Youth economies is expected to expand supported by high Transformation Programme (NYTP) provides an global demand and investment.

9 China is projected Chapter 3 10/20/17 9:43 PM. 4 ECONOMIC REPORT 2017/18. to record a stable growth, supported by effective Likewise, most major ASEAN economies, namely macro-policy mix, strengthening external demand Indonesia, malaysia , the Philippines, Thailand and and progress in domestic reforms. In addition, Viet Nam, are expected to register steady growth India's growth is expected to remain robust driven contributed by strong domestic and external by strong private consumption and services sector. demand. Information Box National Transformation 2050.

10 Introduction The Malaysian economy has made significant strides since independence as reflected by its remarkable growth, driven by a series of structural reforms that began in the 1970s. The launching of the New ECONOMIC Policy (NEP) in 1971 was a turning point in the history of the Malaysian economy. The overarching goal of NEP was national unity achieved through poverty eradication and societal restructuring. In 1991, the country embarked on Vision 2020 to continue its journey to reach the status of an advanced and high-income nation by 2020, moulded according to its own features.