Analysis Of Production Output Performance Essay


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The economy of Malaysia in Southeast Asia it is leading from third place after the much populous nation of Indonesia and Thailand. Malaysia is placed in third place in terms of the richest country in the areas of GDP after the states of Singapore and Brunei. The industrialized market of Malaysia is relatively new which is open and state oriented. The Malaysian economy is considered to be competitive market and it is ranked in 14th position in the straightforwardness of performing trade and commerce for 2015. The present report will be providing the product output performance analysis with special focus on labour markets andanalysis of price level.

GDP can be defined as the monetary assessment of the marketplace value of all the final goods and service manufactured in a period either quarterly or yearly.

GDP growth rate and Performance Trends of Malaysia:

GDP growth rate can be defined as the rate that measures how fast an economy is expanding (Taussig, 2013). It is done by evaluating the outcome of one three month quarter of a country GDP to the previous three month quarter. Rise in the GDP evaluates the financial production of a nation.

The market of Malaysia grew by 5.6 percent in the first three month quarter in the year 2017 in comparison to the 4.5 percent rise before earlier quarter and beyond the market anticipations of 4.8 percent. Ever since the quarter of march in 2015 it is regarded as the strongest expansion because domestic consumption, investment and exports increased at a rapid speed and the expenditure of the government recovered.

During the quarter ending of March, there was an increase in the domestic consumption by 6.6 percent which was quicker than an increase of 6.2 rise in the earlier quarter (Frank et al., 2015). There was an increase of 10 percent in the gross fixed capital in comparison to the 2.4 percent rise in the previous quarter. There was also an increase in export since it increase to 9.8 percent from a rise of 1.3 percent in December. Government expenditure increased to 7.5 percent after rebounding from a fall of 4.2 percent in the previous three months.

Commenting on production, the cultivation sector rose to 8.3% following a decline of 2.5% during the month of December because of rapid growth of 17.7% in the production of palm oil. There was a rise in construction sector of 6.5% from 5.1 percent in the fourth quarter and the service Management rose quickly to 5.8 percent in the preceding the three months (Tradingeconomics, 2017). The growth was majorly responsible in the areas of consumption and commercial services nevertheless, the mining segment rose at a very slower rate with 1.6% from 4.9%.

Taking into the considerations the performance movement of Malaysia is anticipated to assist the national demand. The economy is en route to record superior growth in 2017 in comparison to 4.2 percent growth in 2016 (Sloman et al., 2013). Export is anticipated to gain from the expansion of global growth. Based on quarterly outcomes the Malaysian financial system rose by 1.8%, which was quicker than the 1.3% rise in the earlier periods. It is regarded as the quickest three-monthly expansion since the year 2013.

Figure 1: Figure illustrating GDP Growth Rate of Malaysia

(Source: Tradingeconomics, 2017)

GDP Per Capita of Malaysia:

Taking into the consideration the Malaysian GDP during the year 2016 it was recorded at 25660.60 US dollars. On the other hand, the GDP per capita of Malaysia is equivalent to 144% in terms of the world wide average. It is noteworthy to denote that the average sum of GDP per capita in Malaysia was recorded to be 17932.48 USD from the year 2000 until 2016. It further attained a high of 25660.50 USD in 2016 and also recorded a lowest of 10551.60 USD in the year 2000.

Figure 2: GDP Per Capita PPP of Malaysia

(Source: Tradingeconomics, 2017)

In comparison to Singapore, it recorded Per Capital GDP of 52600.60 US Dollars in the year 2016 which was equivalent to the world’s average of 417 percent of the world’s average (Bernanke et al., 2015). The Singapore GDP per capita PPP at the time of comparing with Malaysia stood at a greater sum of 52600.60 with lowest value of 3389.60 USD in the year 2000.

Government measure to achieve economic performance in Malaysia:

The government of Malaysian undertook the plan of attaining greater productivity for the purpose of gaining higher multi-factor output to GDP rise of 40%. To enhance the output of industries the government undertook the measure of implementing automation and skills up-gradations of the workers. The government also imposes the measures of improving scientific technology in production to achieve economic performance for improved productivity. Considering at the nationwide level, the Malaysian administration targets to apply the productivity agenda from the assistance of “Malaysian Productivity Blueprint”. At the manufacturing stage the Malaysian government aims to increase productivity in output by drawing up the programs for industry level

Analysis of the Labour market:

Unemployment can be defined as the situations where the people who are able are unable to find job at the current wage rate. There are some main kinds of unemployment such as cyclical, seasonal and frictional unemployment.

Types of unemployment:

Cyclical unemployment:

During the financial year there are large number highs and lows faced by the market. This can be referred as cyclical unemployment because it goes in cycle (Stiglitz et al., 2013). Cyclical unemployment generally occurs once an economy moves in the stage of depression where numerous jobs are vanished.

Frictional unemployment:

This kind of unemployment occurs because of the turnover in the market of labour and time consumed by the workforce to locate a new job. In the economic cycle in employment markets there are workers that change their job, when this happens they take time in corresponding the capabilities of the new workers.

Structural unemployment:

This kind of unemployment takes place due to the lack of demand for specific sort of worker (Rios et al., 2013). This happens when there is disparity between the necessary skills and skilled possessed by the workforce. Rapid advancement in technology and discovering a new price employment for international job leads to this type of unemployment.

Trends of Unemployment in Malaysia:

The rate of joblessness in Malaysia was stable at 3.4% for May 2017 in comparison to the equivalent month in the preceding year. The total sum of jobless individuals improved by 0.5 percent from the preceding year to 5.7,500 and the sum of working individuals rose by 1.8% to 14,454,400. The labour force expanded by 1.7 percent to 14,961,900 individuals (Jomo, 2016). Based on the joblessness rate was stable at 3.4% compare to the preceding month. The rate of joblessness in Malaysia averaged approximately 3.28% from the year 2000 until the year 2016. The joblessness rate in Malaysia attained a high of 4.50% in the month of March 2000 and recorded a lowest of 2.70 in August 2012.

Figure 3: Unemployment rate in Malaysia

(Source: Tradingeconomics, 2017)

Measure taken by the Government to attain full employment in Malaysia:

Improving the development of SME:

  1. The development of competitive SMEs is regarded as an important area of focus of the Malaysian Government. It is assumed that 519,000 SME will provide an employment of approximate 2.33 million workforces.
  2. To enhance and encourage the business of SME, the National SME Development Council was created with efforts of strengthening, building of capacity and capability of the SME.
  3. 246 programs consisting of financial commitments of more than US $1 billion is funded for implementation in order to accelerate development and creation of more jobs.

Identifying the importance of Self-employment:

The Malaysian government identifies the significance of self-employment in the formation of job with trade and industry growth. The Malaysian government have made their hard work in the areas of attaining more self-employment chances (Lucas &Verry, 2016). Business openings for self-employment and entrepreneurship comprises of petty trading, SMEs and agriculture that have been encouraged. Implementing entrepreneurship values and altering mindset to consider self-employment as the suitable alternative method for salaried employment. In addition to this, entrepreneurship training programs have been implemented by numerous ministries and agencies for graduates that are unemployed.

Analysis of the Price level:

Trend of Inflation in Malaysia:

Inflation trend Malaysia grew by 3.6% from last year in June 2017, as compared to the 3.9% rise in the earlier month with below market anticipations of 3.9 percent increase. The inflation rate that was recorded stood at the lowest amount from the month of January, majorly because of the reduced pace in the areas of cost of food and transport while inflation was stable for housing and utilities (Tradingeconomics, 2017). The inflation rate rose by 2.5 percent however, it fell marginally from 2.6% rise for May. According to periodical basis, the consumer prices fell by 0.2% in June, and remained same in the previous month and recorded as fourth successive straight drop of the month. The inflation trend attained a high of 23.90 percent during March of 1974 and recorded a lowest of -2.40 percent in July 2009.

Figure 4: Inflation in Malaysia

(Source: (Tradingeconomics, 2017)

Reasons behind Inflation in Malaysia:

Increase in price of Energy

The prime cause of increase in inflation is due to the increase in the price of oil in the universal rise in cost of energy products. The cost of petroleum is forced to rise due to the increase in the price of international crude oil that could be noticed in other nations like India (Taussig, 2013). The rise in price of fuel is evident in Malaysia, though it is very obvious it is yet controlled by the government since Malaysia is also the countries that generate oil and the government is indulged in regulating the price of oil. The slow rise in price of oil has increased the cost of production that eventually contributes to the cost-push inflation Business.

Policy of Minimum wage:

The policy of minimum wage results in inflation due to the rise in the wages (Frank et al., 2015). With an increase in wages substantially pushes the employees and the producers to go through the increased costs to the customers by increasing the price and negotiating higher amount of fees for service contracts. Such government programmes increases the government spending and in the end contributes to inflation.

Demand pull inflation:


In relation to the demand pull inflation, with the current movement of modernization and rapidly expanding nations like China forms the positive features in raising the aggregate demand for the goods and service in Malaysia. As a result of this demand pull inflation is caused.

Increase in government spending:

Recently, the Malaysian government has been ambitiously spending to foster the economic expansion towards economic and government transformation programme (Sloman et al., 2015). Therefore, such programmes involved rigorous spending and forms a significant contributors to the present inflation in Malaysia.

Measures of the Government to achieve price stability:

The government has implemented the policy of achieving the price stability by expanding the convenience and lowering the price of important materials of domestically manufactured and imported products particularly those that becomes the bigger part of the lower and middle earnings group of people (Bernanke et al., 2015). Special export duty were implemented on the timber goods, materials of building and some of the items of food. To curb the rate of inflation the government introduced the campaign of Green Book with the objective of raising the food production.

The government also introduced policies relating to price regulations of elementary consumption and venture goods by increasing the application of Price Control Act. The Price Control Act necessitates obtaining the sanctioning of administration regarding the expansion of prices of commodity in order to curb down nationwide programme of hoarding. The Malaysian government has come with the efforts of reducing the effect of price rise on consumers, especially in the group of people with lower income through the help of providing government subsidies on rice, fertilizers, flour and school text books. The government provided allowance on special relief to the workers that are employed in the public sector in the lower income brackets. Furthermore, the financial policy was intended to dampen the aggregate demand by implementing a controlling on credit and reducing the liquidity of bank together with the liquidity of the private sector. In executing these policies special attention was provided to make sure that systematic growth of productive capacity of the economy was not subdued.


In spite of being a relatively small country Malaysia has achieved development at a faster rate. Despite the prevalence of global financial crisis, Malaysia has made a quicker revival. The GDP and per capita GDP is increasing at a quicker rate to make sure that the financial system is growing at a faster rate. Malaysia is positivelyapproaching towards the attainment of full occupation since the rate of joblessness has been comparatively lower for last some years. As it is evident that Malaysia is an open economy, the Malaysian government has been able to attract FDI to achieve several economic development with positive policies of government in cutting down the inflation and encouraging price stability.

Reference List:

Bernanke, B., Antonovics, K., & Frank, R. (2015). Principles of macroeconomics. McGraw-Hill Higher Education.

Frank, R. H., Bernanke, B. S., & LUI, H. K. (2015). Principles of economics. McGraw-Hill Asia.

Jomo, K. S. (2016). Growth and structural change in the Malaysian economy. Springer.

Lucas, R. E., &Verry, D. (2016). Restructuring the Malaysian economy: Development and human resources. Springer.

Malaysia Core Inflation Rate | 2016-2017 | Data | Chart | Calendar. (2017). Retrieved 8 August 2017, from

Malaysia GDP Annual Growth Rate | 2000-2017 | Data | Chart | Calendar. (2017). Retrieved 8 August 2017, from

Malaysia GDP per capita PPP | 1990-2017 | Data | Chart | Calendar. (2017). Retrieved 8 August 2017, from

Malaysia Unemployment Rate | 1998-2017 | Data | Chart | Calendar | Forecast. (2017). Retrieved 8 August 2017, from

Rios, M. C., McConnell, C. R., & Brue, S. L. (2013). Economics: Principles, problems, and policies. McGraw-Hill.

Sloman, J., Norris, K., & Garrett, D. (2013). Principles of economics. Pearson Higher Education AU.

Stiglitz, J. E., Walsh, C. E., Gow, J., Guest, R., Richmond, W., &Tani, M. (2013). Principles of economics. John Wiley & Sons.

Taussig, F. W. (2013). Principles of economics (Vol. 2). Cosimo,

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