As a result of the ongoing economic reforms, Malaysia’s government expects the country will become a high-income economy by 2020, strengthening its markets and related exchange traded funds.
The iShares MSCI Malaysia ETF (NYSEArca: EWM) has gained 6.1% over the past three months and is up 0.5% year-to-date.
In the annual report on the so-called Economic Transformation Program, the Malaysian government said the economy expanded to $10,060 Gross National Income per capita in 2013, compared to $9,970 in 2012, reports Manirajan Ramasamy for Bloomberg. The government plans to hit $15,000 by 2020.
According to the World Bank, a country has a high-income designation when GNI per capita meets or exceeds $12,616.
The economic program has helped launch 196 projects under the 12 National Key Economic Areas, and six Strategic Reform Initiatives, which promote small- and mid-sized businesses, New Straits Times reports.
“Malaysia’s economic transformation is evolving to acquire the characteristics of a high-income economy that is service-based, private-consumption driven and being less reliant on oil revenues,” the government said in a statement.
Prime Minister Najib Razak has been cutting down on government subsidies to limit fiscal risks, which have led to a cut in the country’s credit outlook in July by Fitch Ratings. Consumption is now said account for over half of the gross domestic product.