Malaysia’s economy is showing strong momentum and if current trends continue, the country could overtake Japan in terms of nominal GDP per capita within the next decade.

With its steady economic growth, Malaysia is on its way to surpass Japan's GDP per capita.
With its steady economic growth, Malaysia is on its way to surpass Japan’s GDP per capita.
Image credits: Canva

According to a recent report by Business Insider, Malaysia’s consistent economic growth, particularly in sectors such as technology, manufacturing, and services, has significantly improved its GDP per capita in recent years.

Malaysia’s economic growth gaining pace

The report highlights Malaysia’s rapid economic development:

  • Malaysia’s current GDP per capita is comparable to Taiwan’s levels in 2012.
  • If the pace of growth remains steady, Malaysia could match or exceed Japan’s GDP per capita by 2035.
  • Strong performance in key sectors like tech, manufacturing, and services is helping to drive this upward trajectory.
  • Ongoing foreign direct investment (FDI) and a young, growing workforce are further strengthening economic prospects.
Japan is facing economic growth hurdles. For illustration purposes only.
Image credits: Canva

Japan facing growth hurdles

While Malaysia’s economy is accelerating, Japan is facing several structural challenges:

  • Japan’s economic stagnation and aging population are limiting its growth.
  • Despite being one of the most advanced economies in the region, these issues have slowed Japan’s per capita income growth.

Factors supporting Malaysia’s economic growth

Malaysia’s edge in the coming years may lie in its strategic planning and favourable demographics:

  • Youthful population driving labour market growth and consumption.
  • Increased focus on digital transformation and green technologies.
  • Ongoing efforts to upskill the workforce and attract high-quality investments.
  • Government support for innovation and industrial upgrades.

These developments are helping Malaysia build a stronger, more resilient economy that’s less reliant on traditional sectors.

Malaysia's economic growth shows a steady incline.
Malaysia’s economic growth shows a steady incline. For illustration purposes only.
Image credits: Canva

Government’s role in driving progress

Malaysia’s long-term economic strategy is centred on:

  • Investing in digital infrastructure and innovation ecosystems.
  • Enhancing FDI opportunities and trade partnerships.
  • Supporting the green economy through sustainable practices and policies.
  • Encouraging inclusive economic participation, especially among the younger generation.

Looking ahead: Can Malaysia catch up to Japan?

While Japan remains an economic heavyweight with robust infrastructure and global influence, Malaysia’s growth path paints an optimistic picture:

  • Experts believe Malaysia could realistically narrow the GDP per capita gap with Japan over the next 10 years.
  • The nation’s dynamic approach to economic reform and innovation makes it one of Asia’s rising stars.
  • If these current growth trends hold, Malaysia could indeed become a key economic player in the region by 2035.

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