KUALA LUMPUR, Oct 6 — The Economic Affairs Ministry today explained how it arrived at the target for Malaysia’s gross domestic product (GDP) to reach RM3.4 trillion by 2030 under the Shared Prosperity Vision, rebutting former prime minister Datuk Seri Najib Razak's gleeful claims it miscalculated.
Najib yesterday crowed on Facebook about the government's alleged miscalculation, claiming that Malaysia would need an average GDP growth rate of 7.36 per cent annually to reach RM3.4 trillion by 2030 and alleging that 4.7 per cent would only result in a RM2.53 trillion economy by then.
Economic Affairs Minister Datuk Seri Azmin Ali today pointed out Najib's “confusion,” noting that the official figures would correctly result in projected economic value.
“@NajibRazak confused about calculations for GDP growth target between 4.5 per cent to 5 per cent at constant prices that result in GDP of RM3.4 trillion (calculated at nominal/current prices) by 2030,” Azmin wrote on his official Twitter account today when explaining that the government figures were correct, before citing the ministry's statement today.
In the statement, the ministry explained that there were two different concepts to measure the GDP, namely by using current prices or nominal prices that take into account the effects of inflation, or by using constant prices that do not take into account inflation but reflect the actual rise in output or added value.
“Usually, the GDP value is stated in nominal prices while the GDP growth rate is stated in constant prices,” it said.
Pointing out that the Shared Prosperity Vision 2030 document expressly and clearly mentioned the use of these two differing measures to calculate Malaysia's targeted GDP by 2030 and the targeted GDP growth rate, the ministry reaffirmed the accuracy of its calculations.
“It has to be stressed that the calculations of GDP of RM3.4 trillion is at nominal/current prices that take into account inflationary effects.
“Therefore, to achieve targeted GDP value of RM3.4 trillion in 2030, GDP has to grow at constant prices of 4.7 per cent annually from 2018 to 2030 with average inflationary effect of 2.3 per cent during that period,” the ministry said.
“Or in other words, the targeted GDP value of RM3.4 trillion can be achieved with average growth at nominal prices of seven per cent annually for the period 2018 to 2030,” it said.
Prime Minister Tun Dr Mahathir Mohamad yesterday launched the Shared Prosperity Vision 2030, a roadmap aimed at restoring the country’s economy and to provide a decent living standard by 2030 to all Malaysians regardless of their ethnicity, social class and location within the country.
Following his coalition Barisan Nasional’s defeat in Election 2018, Najib who is still Pekan MP now attends court hearings for his corruption trials linked to the 1Malaysia Development Berhad (1MDB) financial scandal, while also taking potshots at the ruling Pakatan Harapan coalition via Facebook.
