Malaysia is getting closer to becoming a high-income nation, with the country now just 7.1% below the World Bank’s high-income threshold after the economy grew 5.8% year-on-year in the second quarter of 2026.
Economy Minister Datuk Akmal Nasrullah Mohd Nasir said the stronger-than-expected growth, combined with low inflation and a resilient labour market, showed that Malaysia’s economy remained on solid ground despite ongoing global uncertainties.
Malaysia getting closer to high-income status
Malaysia’s gross national income (GNI) per capita rose to RM57,200 in 2025, equivalent to around US$13,351 under the World Bank Atlas method. The World Bank’s current high-income threshold stands at US$14,375, putting Malaysia within reach of the benchmark.
However, Akmal stressed that reaching the threshold should not be viewed as the ultimate goal.
“What matters is whether growth delivers better wages, more quality jobs and stronger purchasing power for Malaysians,” he said.
Economy expected to grow 4% to 5% this year
The government is maintaining its 2026 economic growth forecast of between 4% and 5%, supported by strong domestic demand, private investment and exports.
High-tech industries, including semiconductors and data centres, are also expected to continue supporting the economy.
Inflation remains relatively low at 1.9%, while the unemployment rate stands at 3%.
35.6% of tertiary-educated workers are in jobs below their skill level
Despite the positive economic figures, Malaysia still faces a major challenge in making sure economic growth translates into better jobs and higher incomes.
The OECD report found that 35.6% of Malaysians with tertiary education are working in jobs below their skill level.
Akmal said Malaysia could no longer measure success simply by the number of graduates produced.
Under the 13th Malaysia Plan, the government plans to strengthen the connection between education and industry, while expanding TVET and upskilling programmes in areas such as artificial intelligence, semiconductors and the digital economy.
Fiscal deficit also improving
Malaysia’s federal fiscal deficit has also narrowed, falling from 5.5% of GDP in 2022 to 3.7% in 2025. The government aims to reduce the deficit to 3% or below by 2030, while continuing to provide targeted assistance to vulnerable groups.
Akmal said Malaysia’s next challenge is to move away from labour-intensive growth and towards a more innovation-driven economy powered by skilled workers, digital adoption and higher-value industries.
While Malaysia is getting closer to the World Bank’s high-income benchmark, the government says the real measure of success will ultimately be whether that economic progress translates into better salaries, quality jobs and a higher standard of living for Malaysians.
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