The Unemployment Trend over the Last Three Years in Malaysia; 2014, 2015 and 2016

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This was before the Goods and Service Tax (GST) was implemented in April 2015. Due to this in the consequent half of the remaining year, the growth in the domestic demand in the market toned down to moderate and experienced a slight increment in external demand which help provide additional strength to our economic growth.

Moving on to the next year, the Malaysian economy based on a quarter to quarter approach, the economy gained by 1.4% which was similar to the downwardly revised 1.4% growth in the previous period of time. In the whole year itself, the country’s economy has experienced a growth of 4.2% but was still lower to the previous year growth which was at 5.0%. The Malaysian economy managed to grow 4.5% year on year in the fourth quarter of the year 2016. This was compared to the 4.3% growth in the previous three months and this was of course also up to expectations of the market sector. This was to be the strongest sense of growth experienced by the country since December 2015.

This was because there was a comeback in terms of exports, a rapid increment in investments pouring in the country and also while the private consumption remains high. Exports also showed a significant improvement, growing at the fastest pace during the final quarter of 2016 which was due to the fact that we had a weaker ringgit and also because the oil prices are rising. Government consumption, which was introduced for the first time since the second quarter 2014 had unintentionally been a drag on growth in the final quarter of the year 2016 due to the government’s commitment to its fiscal consolidation agenda for 2016. (Refer to Appendix I)

The final aspect of this assignment is to deliver our views on employment prospects in the overall year 2017. Firstly according to Trading Economics global macro models and analysts expectations, the GDP Annual Growth Rate in Malaysia is expected to reach a rough 4.60 percent by the end of this quarter.

In projecting forward forecast, it is to be estimated that the GDP Annual Growth Rate in Malaysia is to remain at 4.30 in 12 months’ time. If looked at a much longer timeline, the Malaysia GDP Annual Growth Rate is projected to breach around 3.70 percent in 2020. Furthermore, based on the information provided by the Malaysian Rating Corp Bhd (MARC), the country GDP growth would come to a low halt of 4.0% at the end of 2017 which is incrementally lower than the 4.3 % achieved in the third quarter of 2016. The ratings agency has also proclaimed that the domestic demand will continue to support the economy on the back of stronger momentum in private investment which will offset a slower growth in private consumption.

MARC has stated that the jobless rate has climbed to 3.5% in the third quarter of the year 2016. Viewing this, it is not wise to foresee a sharp decrease in consumer spending growth. MARC has also expected the inflation rate to climb to 2.5%–3% in 2017. This is thought possible due to the further subsidy rationalisation as the government remains committed to its fiscal consolidation efforts. Looking at the graph in Appendix I, it is clear if our growth continuously grows incrementally smaller every time, it has a direct effect on the rate of unemployment in this country, Malaysia.

Appendix I

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Reference List

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