Good growth recorded for M’sia’s micro, small, and medium enterprises in 2023

KUALA LUMPUR (Aug 2): Malaysia’s micro, small, and medium enterprises (MSMEs) recorded good growth across main macroeconomic indicators including gross domestic product (GDP), exports, employment, and productivity growth last year.

Minister of Entrepreneurship Development and Cooperatives Datuk Ewon Benedick said his ministry is dedicated to enhancing the growth of the country’s MSMEs.

“The Ministry of Entrepreneurship Development and Cooperatives (Kuskop), along with its agencies, particularly SME Corp Malaysia, is fully committed to implementing various initiatives.

“This involves promoting MSME participation in both domestic and global supply chains, enhancing MSME capacity for international expansion, offering inclusive financing options, continuing to advocate for the implementation of Environmental, Social, and Governance (ESG) practices in business operations, and intensifying entrepreneurial endeavors in Sabah and Sarawak,” he told a press conference at the MSME Performance 2023 event here recently.

According to the Department of Statistics Malaysia (DoSM), MSMEs’ contribution to GDP grew 5 per cent in 2023 to RM613.1 billion, demonstrating its importance to the Malaysian economy.

After China reopened international borders in early 2023, tourism-related spending boosted the services sector, particularly transport and storage, wholesale and retail trade, food and beverage, and accommodation subsectors.

The growth of MSMEs continued to surpass the overall economic growth, with a 3.6 per cent increase last year.

The contribution of MSMEs to the entire economy grew from 38.6 per cent in 2022 to 39.1 per cent last year.

This impressive performance demonstrates the resilience and significant impact of MSMEs as the primary catalyst for the nation’s progress and steadiness.

Despite the difficult economic conditions, MSME exports experienced significant growth, reaching a value of RM152.2 billion in 2023 with a growth of 4.5 per cent compared to the previous year.

There was also a notable rise in MSME export contribution, with an increase from 10.6 per cent in 2022 to 12.2 per cent in 2023.

The growth momentum of these exports was primarily fueled by ongoing expansion in the services sector, particularly in tourism-related industries and the agricultural sector.

On the other hand, firms that are not MSMEs saw a significant decline of 11.0 per cent in 2023, following an impressive growth of 27.2 per cent in 2022.

Meanwhile, the nation’s overall export growth experienced a decline in 2023, which can be attributed to factors such as sluggish global demand, decreased commodity prices, geopolitical uncertainty, high inflation rates, and a downturn in the semiconductor industry.

Regarding the job market, MSMEs employed 7.86 million workers in 2023, indicating a 3.5 per cent growth compared to the previous year.

The rise in employment by MSMEs played a significant role in the overall increase in employment, which reached 48.5 per cent last year.

Furthermore, there has been a slight increase in the productivity of MSME workers where the real value added per worker rose to RM78,035 compared to RM76,919 in the previous year.