DEMOGRAPHIC TRENDS AND ECONOMIC PERFORMANCE: ANALYSING MALAYSIA’S GROWTH TRAJECTORY
This study explores the relationship between demographic trends and economic performance in Malaysia, a Southeast Asian country with a population of over 34 million as of 2023. Despite significant economic growth and high GDP per capita, the nation faces challenges due to an ageing population and declining fertility rate (2.2 children per woman in 2022). These trends could lead to series of issues like smaller working-age population, reduced savings, and consumption, lower productivity, and higher social security costs, possibly harming future economic growth without early policy interventions. Covering 1970 – 2022, the study used data from World Bank, Malaysia’s Department of statistics, United Nations, and Macrotrends. Descriptive statistics, boxplots, cointegration tests, and ARDL/ECM techniques were employed to explore the interplay between the variables of the study with the aid of EViews software. Analysis findings indicates that population growth rate, past GDP values, inflation, foreign direct investment, unemployment, and labour force participation significantly impact GDP value at different times. This study concludes by recommending that policymakers in Malaysia, incorporate changes in demographic trends/population dynamics impacts into economic strategies, promote long-run equilibrium to ensure that economy is self-correcting and can withstand shocks in the short-run, control inflation in a balanced and prudent manner, attract stable domestic and foreign direct investments, and enact job creation and training policies to ensure inclusive and sustainable economic growth and resilient to short-term shocks.
Demographic Trends, Economic Performance, Malaysia, ARDL ECM Analysis, Impacts.