MALAYSIA

Moderate slowdown amid global headwinds

BB2

MEDIUM RISK for entreprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

The country risk assessments are your North Star metrics to make the right decision for your business and understand the risks in international trade. We have always the best solution for your needs

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GDP USD314.5bn (World ranking 37, World Bank 2017)
Population 31.62mn (World ranking 45, World Bank 2017)
Form of state Constitutional Monarchy
Head of government Mahathir bin Mohamad (PM)
Next elections 2023, legislative
  • Member of the Association of Southeast Asian Nations (ASEAN)
  • Low inflation
  • Generally strong business environment
  • Resilient banking sector
  • Vulnerable to external pressures
  • Export dependency leads to cyclical risk
  • High level of private external debt
  • High household debt and high external debt burden

Trade structure by destination/origin

(% of total)

Exports Rank Imports
Singapore 15%
1
20% China
China 13%
2
10% Singapore
United States 10%
3
8% Japan
Japan 8%
4
8% United States
Thailand 6%
5
6% Thailand

Trade structure by product

(% of total)

Exports Rank Imports
Electrical machinery, apparatus and appliances, n.e.s. 25%
1
23% Electrical machinery, apparatus and appliances, n.e.s.
Petroleum, petroleum products and related materials 10%
2
9% Petroleum, petroleum products and related materials
Office machines and automatic data processing machines 7%
3
4% Other industrial machinery and parts
Fixed vegetable oils and fats, crude, refined or fractionated 5%
4
3% Telecommunication and sound recording apparatus
Telecommunication and sound recording apparatus 5%
5
3% Office machines and automatic data processing machines
Even though the payment behaviour of domestic companies is good, the law provides no framework when it comes to late payment.  As a result, interest rates and collection costs should be considered as part of the contract but often have little impact.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings

Despite recent efforts, the courts' independence and transparency still have margin for improvement. While lawsuits can be slow and should be avoided whenever possible, recent reforms have seen lawsuits resolved more quicky.

In the absence of an efficient and functional debt restructuration scheme, debtor insolvency would only be dealt with through liquidation proceedings, which generally results in low recovery chances for unsecured creditors.

Contact

Contact Euler Hermes

Economic Research Team

research@eulerhermes.com

Contact Mahamoud Islam

Senior Economist for Asia

mahamoud.islam@eulerhermes.com

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