The impact of macroeconomic variables towards economic growth in Malaysia / Noor Syahirah Mohd Zamburi

This paper examines the impact of macroeconomic variables towards economic growth in
Malaysia for the period 1987 until 2016. The selected independent variables are inflation rate,
population growth, unemployment rate and interest rate. This research used econometric
methods. The investigation of unit root has been performed using ADF test, PP test and
KPSS test for all variables included in the study. The results imply that each of the variables
were stationary. By using annually data from 1987 until 2016, it was found inflation and
population have positive impact on economic growth. Nevertheless, unemployment and
interest rate have negative impact on economic growth in Malaysia. Hence, the researcher
suggested that BNM keep control rate of interest to avoid high inflation rate and the future
researcher add more variables to sturdy the data.