Palm Oil and Gross Domestic Product (GDP) in Malaysia
Artikel ini juga tersedia dalam Bahasa Melayu
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Palm oil and Gross Domestic Product ("GDP") are both important components in ensuring economic growth.
First fact: Malaysia is the world''s second-largest palm oil producer after Indonesia.
Second fact: the palm oil export market has expanded not only across Asia but also into Europe.
Several countries have become primary destinations for palm oil exports, including India, China, the European Union, Turkey, and Pakistan.
Nevertheless, Malaysia has had to contend with numerous external factors that have caused palm oil demand to decline year after year.
International crises heavily influence the palm oil market.
For instance, the European Union ("EU") has made plans to restrict the supply of this commodity.
Most recently, the EU launched a global anti-palm oil campaign.
Malaysia has also fallen victim to these circumstances. As a result, the government has had to work tirelessly to counter this campaign.
These efforts need to be implemented promptly so that palm oil prices can stabilise once again.
If not, the net export rate of palm oil will decline, subsequently lowering Malaysia''s Gross Domestic Product (GDP) figures.
Gross Domestic Product is an indicator of a country''s economic development and momentum, closely tied to the broader economy.
If GDP figures decline, it indicates that the country''s economy is not performing well. The reverse also holds true.
There are several key classifications to consider when measuring economic growth through GDP.
The method of determination involves accounting for expenditure — by adding up consumption, investment, government spending, and net exports.
Consumption refers to the purchase of any goods, whether food or services.
A healthy economy is reflected when businesses thrive and the circulation of money within the economic ecosystem becomes more vibrant.
Successful businesses increase employment opportunities and reduce unemployment.
Meanwhile, the circulation of money within the economic ecosystem indicates that the income of individuals or institutions is growing.
Investment is often synonymous with multiplying returns.
The investment contribution to GDP can be observed through various aspects.
It is not limited to the inflow of funds from direct foreign investment alone — it also encompasses investment in creating more employment opportunities for citizens and foreigners across various sectors.
The creation of numerous employment opportunities produces quality, productive, and competitive workers.
This represents a valuable investment if Malaysia can develop various skills across multiple fields through human capital development.
In addition, stock market activity also contributes to the overall GDP figure.
Government expenditure involves building infrastructure — in terms of public transport, healthcare, and services such as education scholarships and schools.
Net exports refer to the production of Malaysian goods and services sold abroad, minus imports.
The palm oil industry in Malaysia is currently under significant pressure.
Among the main reasons contributing to the decline in crude palm oil prices are the boycott by the European Union, the trade war between the United States and China, and strained relationships with buyers from China and India.
Additionally, it may also be caused by supply and demand factors, as well as excess stock.
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Palm oil is one of the major contributors to Malaysia''s GDP, as the country is among the largest palm oil producers and exporters in the world.
GDP is the total value of goods and services produced within a country over a year — it is the primary indicator of a nation''s economic strength.
Factors include the boycott by the European Union, the US-China trade war, strained relationships with buyers from China and India, as well as excess stock and supply-demand dynamics.
Falling palm oil prices impact the profits of plantation companies listed on Bursa Malaysia, which in turn affects the index and investor sentiment in related sectors.
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