The Economic Affairs Ministry has rebutted ex-premier Najib Abdul Razak’s claim that it had erred in calculating the annual gross domestic product (GDP) growth needed to hit the RM3.4 trillion GDP target in 2030.
The RM3.4 trillion target is the projected amount required to achieve the Shared Prosperity Vision 2030 (SPV 2030).
“To achieve a RM3.4 trillion GDP target by 2030, the GDP must grow at constant prices at 4.7 percent a year from 2018 to 2030, with an average inflation rate of 2.3 percent,” said the ministry in a statement today.
“In other words, the goal of a RM3.4 trillion GDP can be achieved with an average growth at nominal prices of 7 percent a year between 2018 and 2030.”
The Ministry clarified that the 4.7percent growth rate was a constant price, whereas the nominal prices taking into account the effects of inflation would amount to 7.0 percent.
Typically, the ministry said GDP values were stated in nominal prices, while GDP growth rates were stated in constant prices.
It should be noted however that in 2018, the average inflation rate in Malaysia amounted to about 0.97 percent compared to the previous year.
Last month, the inflation rate had risen to 1.5 percent.
The MEA said the SPV 2030 document clearly made a distinction between the figures according to the nominal and constant measurements. However, there was no specific mention of inflation as a factor in the document.
Minister Azmin Ali followed the ministry statement with a tweet in which he accused Najib of attempting to divert public attention from the 1MDB trial.
He said the former prime minister should focus on calculations of how many billions of the public's monies were robbed from the national treasury.
Yesterday, Najib posted on Facebook that the 4.7 percent figure was inaccurate, saying that to hit the RM3.4 trillion mark by 2030, the country needs to achieve an average growth rate of 7.36 percent, not 4.7 percent.