DURING the period under review, the gross domestic product (GDP) in real terms grew at an average rate of 3% per annum compared with the 8MP target of 7.5%.
Although below expectations, the performance was better than that of other countries in the region.
During this period, per capita gross national product (GNP) increased by 2.4% per annum from RM13,352 in 2000 to RM14,324 in 2003.
Per capita GNP in terms of purchasing power parity recorded a higher growth of 3.9% yearly from US$8,360 in 2000 to US$9,380 in 2003 as a result of lower domestic inflation and stable exchange rate.
Economic growth at the beginning of the review period was largely driven by domestic demand and followed by an improvement in external demand during the latter part of the period.
Private investment which contracted during the first two years before turning around in 2003, registered a negative growth of 10.8% per annum, compared with the target of 19%. While investments in the manufacturing and services sectors declined as a share of total private investment, the share of investment in agriculture and mining increased.
Private consumption made an important contribution to growth during the review period, expanding at an average 4% per annum in real terms. Public consumption in real terms also recorded higher growth at an average rate of 12.1% compared with the plan target of 7.7%.
The agriculture, forestry, livestock and fishing sectors recorded an average growth of 1.5% during the review period, lower than the plan target of 3%.
The mining sector grew at 2.5% compared with the target of 3.3%.
The construction sector recorded an average growth of 2.3%. Growth in the residential and non-residential sub-sectors was due to the continued focus of the federal government in the construction of roads, schools, community colleges , universities and public low-cost houses.
The services sector expanded at an average 4.7%, supported by strong domestic demand and improved trade-related activities.
But the biggest setback was in the manufacturing sector, which averaged growth of only 1.5% compared with the Plan target of 8.9%. The slower growth was due to the 5.8% contraction in 2001, which brought down the average growth rate despite the expansion of 4% and 6.5% recorded in 2002 and 2003, respectively.
Gross national savings as a percentage of GNP declined from 40% in 2000 to 35.2% in 2003. During the period under review, gross investments including change in stock declined by 1.2% per annum, brought about largely by the sharp fall in private sector investment in 2001.
To accelerate the transformation to a knowledge-based economy, the government launched the Knowledge-based Economy Master Plan (KEMP) in 2002.The KEMP reiterates the strategic thrusts outlined in the Third Outline Perspective Plan, 2001-2010, and contains 136 recommendations encompassing human resource development, infrastructure, incentives, science and technology development, reorientation of the private and public sectors as well as addressing the digital divide.
In terms of the Knowledge-based Economy Development Index (KDI), Malaysia remained at 17th position in 2003, similar to that in 2000.
