Gross Domestic Product
In 2018 Penang registered a gross domestic product (GDP) of RM91.2bil, with a year-on-year (y-o-y) growth rate of 5.1%, which is 0.4% higher than the national rate of 4.7%. The state continued to contribute 6.7% to the national GDP (Table 1).
In terms of economic activity, the services and manufacturing sectors respectively showed positive growth rates of 5.8% and 5.5% annually from 2015-2018. Though the mining and quarrying sector contributed only 0.2% to the state’s GDP, it has expanded significantly to 6.7% over the last four years – the highest growth rate among all economic sectors. On the other hand, the agriculture and construction sectors shrunk moderately by 1.9% and 1.6% per annum respectively (Table 1).
Penang recorded the third largest per capita GDP of RM52,937 in 2018 (versus RM44,682 for Malaysia), trailing behind KL (RM121,293) and Labuan (RM74,337) (Figure 1).
Penang’s inflation rate remained low in 2019. Based on the latest available statistics, the rate – as a percentage change of Consumer Price Index (CPI) – was recorded at 1.5% in September 2019 (y-o-y) despite the re-introduction of the Sales and Services Tax (SST). This was mainly attributed to the decrease in prices of clothing and footwear (1.8%) and transport (2.7%) (Figure 2). We observe positive inflation rates in other components after the SST was re-implemented a year ago.
Based on data obtained from the Department of Statistics Malaysia, Penang International Airport (PIA) at Bayan Lepas and Penang Port (Butterworth) are the two major trading ports in Penang. Specifically, PIA handled more than 75% of the total trade value, while the Penang Port handled another 22% (Table 2). In comparison to the first half of 2018, Penang’s total trade value fell merely by 0.7% to RM 228.4bil in 2019. This was mainly due to the drop in import values for machinery and transport equipment.
In comparison to other states, Penang recorded the highest export values, which accounted for nearly 30% of total exports, and was ranked third for its total import values in Malaysia (Figure 3).
Despite its labour force participation rate (LFPR) moderating to 67.7%, the state’s economy is classified at full employment – those who are willing to work are employed, with the unemployment rate standing below 4% in 2018 (Table 3). Interestingly, males experienced higher unemployment rate (2.4%) compared to their female cohorts (1.9%), while the rate in rural areas improved from 3.4% in 2017 to 3% in 2018 in contrast to urban areas.
In terms of educational attainment, the tertiary-educated workforce had the highest LFPR at 69.5% in 2018, but with the highest rate of unemployment at 2.6% (Figure 4).
On the other hand, Penang’s youth unemployment rate (aged between 15-24) has been on the rise, reaching 7.4% in 2018. This increase was attributed to a total of 7,500 unemployed youths aged 20-24 as compared to 2,400 unemployed youths aged 15-19 in 2018.
The median salaries and wages in Penang increased by 2.5% to RM2,215 in 2018 from RM2,160 in 2017 (Figure 6). Putrajaya, KL, Selangor, Labuan, Johor, Negeri Sembilan and Melaka stood above the national median salary of RM2,308.