Comparative analysis of Economies of Malaysia and India

Group 9 Dipesh Devani 12P018 Lalima Bassi 12P025 Milan Garg 12P028 Rajat Trehan 12P038 Shrimoy Tripathy 12P048 Tarun Jain 12P058

Malaysia
Industrialised market economy

3rd largest in South East Asia

5-7 % growth rate since 2007 Largest centre for Islamic Banking Largest exporter of Semiconductor products

Gross Domestic Product

GDP: The monetary value of all the finished

goods and services produced within a countrys border in a specific time period. It is usually taken annually. GDP by expenditure method Y = FCE + GCF+ (X M) FCE: Final consumption expenditure GCF: Gross Capital Formation Net Exports: X-M

GDP at constant prices(2000)

1,200,000,000,000.00 1,000,000,000,000.00

800,000,000,000.00

600,000,000,000.00

GDP (constant 2000 US$) Malaysia

GDP (constant 2000 US$) India

400,000,000,000.00

200,000,000,000.00

0.00 2006 2007 2008 2009 2010 2011

GDP Per Capita ( Current Prices)

12,000.00
10,000.00 8,000.00 GDP per capita (current US$) Malaysia GDP per capita (current US$) India 4,000.00

6,000.00

2,000.00

0.00 2006 2007 2008 Year 2009 2010 2011

GDP Growth Rate

12.00 10.00 8.00 6.00 4.00 2.00 0.00 2006 2007 2008 2009 2010 2011 GDP growth (annual %) Malaysia GDP growth (annual %) India

-2.00
-4.00

 Contraction in GDP in 2010

Fall in demand due to global slowdown Manufacturing contracted while services recorded

positive growth
Main Industries
Rubber and palm oil processing and manufacturing,

pharmaceuticals, medical technology, electronics, tin mining and smelting, timber processing

Final Consumption Expenditure

Expenditure on goods and services that are used

for the direct satisfaction of individual needs (individual consumption) or collective needs of members of the community (collective consumption) The expenditure picks up in 2009-10 due to government stimulus amounting to RM7 billion stimulus and then a second stimulus amounting to RM60

80 70 60 50 40 30 20 10 0 2006 2007 2008 2009 2010 2011 Final consumption expenditure (% of GDP) Malaysia Final consumption expenditure (% of GDP) India

8E+11 7E+11 6E+11 5E+11 Final consumption expenditure (constant 2000 US$) Malaysia Final consumption expenditure (constant 2000 US$) India

4E+11
3E+11 2E+11 1E+11 0 2006 2007 2008 2009 2010 2011

Gross Capital Formation

It measures the value of acquisitions of new or

existing fixed assets by the business sector, governments and households less disposals of fixed assets pick The investments dip in 2009 and pick up in 2010. Investments were directed at reducing the impact of contracting aggregate demand from falling exports

45 40 35 30 25 20 15 10 5 0 2006 2007 2008 2009 2010 2011 Gross capital formation (% of GDP) Malaysia Gross capital formation (% of GDP) India

4.5E+11 4E+11 3.5E+11 3E+11 2.5E+11 2E+11 1.5E+11 1E+11 5E+10 0 2006 2007 2008 2009 2010 2011 Gross capital formation (constant 2000 US$) Malaysia Gross capital formation (constant 2000 US$) India

Savings
Saving is income not spent, or deferred consumption
Savings: National Income Consumption Expenditure

40 35 30 25 20 15 10 5 0 Gross savings (% of GDP) Malaysia Gross savings (% of GDP) India

2006

2007

2008

2009

2010

6E+11 5E+11 4E+11 3E+11 2E+11 1E+11 0 2006 2007 2008 2009 2010 Gross savings (current US$) Malaysia Gross savings (current US$) India

Net Exports
Net Exports = Exports Imports
60,000,000,000.00 40,000,000,000.00 20,000,000,000.00 0.00 2005 -20,000,000,000.00 -40,000,000,000.00 -60,000,000,000.00 -80,000,000,000.00 -100,000,000,000.00 2006 2007 2008 2009 2010 India IND Net trade in goods and services (BoP, current US$) Malaysia MYS Net trade in goods and services (BoP, current US$)

 Malaysia has trade surplus

Main exports: electronic equipment, petroleum

and liquefied natural gas, wood and wood products, palm oil, rubber, textiles, chemicals Imports: machinery, petroleum products, plastics, vehicles, iron and steel products, chemicals Semiconductor industry demand was affected by global slowdown in 2008 and subsequently improved

Sectorial Contribution to GDP

Agriculture

Services
Manufacturing

Agriculture
20 18 16

14
12 10 8 6 4 2 0 India Agriculture, value added (% of GDP) Malaysia Agriculture, value added (% of GDP)

2005

2006

2007

2008

2009

2010

2011

Manufacturing
35 30

25

20

India Manufacturing, value added (% of GDP) Malaysia Manufacturing, value added (% of GDP)

15

10

0 2005 2006 2007 2008 2009 2010 2011

Services
60

50

40 India Services, etc., value added (% of GDP) Malaysia Services, etc., value added (% of GDP) 20

30

10

0 2005 2006 2007 2008 2009 2010 2011

Consumer Price Index

The CPI is calculated by taking price changes for

each item in the predetermined basket of goods and averaging them; the goods are weighted according to their importance. Changes in CPI are used to assess price changes associated with the cost of living.
A large number of goods are price controlled hence

curtailing inflation Government undertaking Subsidy Rationalization Programs so that growth is not hampered

14

12

10

India Inflation, consumer prices (annual %) Malaysia Inflation, consumer prices (annual %)

0
2005 2006 2007 2008 2009 2010 2011

Central Government Debt

70 60

50

40

India Central government debt, total (% of GDP) Malaysia Central government debt, total (% of GDP)

30

20

10

0 2005 2006 2007 2008 2009 2010

 The government debt has increased drastically in

2010 due to recession spending Fiscal stimulus package of RM67 billion

Monetary Policy
The Malaysian central bank imposed capital

controls to prevent the outflow of the Ringgit in the open market. The Ringgit is not traded internationally, a traveller needs to declare to the central bank if taking out more than RM10,000 out of the country Floating exchange rate adopted in 2005 The OPR Overnight Policy Rate is used to control inflation

REFERENCES
UNDP Malaysia report

Tradingeconomics.com
IMF database Wikipedia

THANK YOU