Malaysia : The savings-investment gap, financing needs and capital market development

Abstract

The mobilisation of savings is an important prerequisite for capital formation and hence, national development. Economic growth can be sustained only if resources are mobilised efficiently and transformed effectively into productive activities. Historically, Malaysia had managed to sustain a high level of savings. On the whole, the country saved an average of 24% of GNP a year over the last three decades, a level amongst the highest in the world. In the past five years (1986-90), the ratio was as high as Because of the availability of adequate savings for productive long-term investment, Malaysia had consistently achieved a high rate Growth in the gross of growth with relative price stability.