The determinants of economic growth in Malaysia

This study aims to identify the key determinants of economic growth in Malaysia. As economic growth is a central measure of national development (Lai, 2003), the study uses Real Gross Domestic Product (RGDP) as the proxy for economic growth. The research analyzes historical time-series data from 1983 to 2014, collected from DataStream, Bank Negara Malaysia, EIU Country Data, and other related sources. The study employs Multiple Linear Regression with time-series data to investigate the relationship between various macroeconomic variables and economic growth. Econometric tests were conducted to determine the nature and significance of these relationships. The findings reveal mixed results among the determinants. Imports and inflation show a significant positive impact on economic growth, while exports exhibit a significant negative impact during the sample period. Conversely, government expenditures show no significant impact on economic growth. The significance of this research lies in providing a reference for investors and the government to formulate future national economic plans. Furthermore, the findings are critical for exporters and importers, enabling them to anticipate the country's economic conditions when planning product production and import levels. Additional studies are recommended to fully explain the impact of other crucial factors affecting Malaysian economic development.