From the article “State of the MalaysianEconomy” by Izwan Idris, published in The Star Online and the article “FocusEconomics” published in Economic Forecasts from the World’s Leading Economists,we can summarize that Malaysia’s economic was expected to grow slower in 2016compared with 2015, as the government projects slower growth in themanufacturing, services and construction sectors. In my opinion, the slower economic growthin year 2016 in Malaysia is because of the poor public education and healthservice toward the consumer. The workers with the poor education will have theless knowledgeable on using the new technology similar as the workers who areunhealthy also will lead to reduce in the productivity. The lesser the outputcan be produce, the decrease in the real GDP. To overcome this issue, in year 2016 thegovernment can improve the healthcare and education service to the public.
Aspeople’s health improves to become stronger, and less susceptible to disease,the productivity will be increase. When the productivity increases, there aremore output can be produce, and increase in the real GDP. Government could also improve in thetechnological changes by using better machinery and equipment. The invention ofthe new machinery has been an important source of rising labour productivity.Increase in physical capital workers have available, the more output can beproduce; similar as the increase in human capital through the education, theproductivity also will be increase as the worker having more knowledgeable tomanipulate the new machine. The most important things are the organizationshould have the knowledge in organizing and managing the production. A fullexperiences and knowledgeable manager would have the more efficient andeffective ways in organizing the production that will lead to the increasing inthe labour productivity.
Government could decrease theirexpenditure through the spending by federal, state, and local governments ongoods and services, but the transfer payment is excluding to increase the totalGDP. Government can reduce the interest rate on loan as the firms can do moreinvestment with the lower rate of interest to increase the GDP. When there isan increasing in the investment, will increase in the saving also because theyare directly relative to each other as (Saving = Investment). Both of thesaving and investment increase, the level of loanable funds will increase asthe money supply increase, and the Real GDP also will be increase.