When measuring a country’s economic performance, economists usually look at its gross domestic product (GDP), which is the total value of goods and services produced in the country in a period of time.
In Malaysia, there are 13 states and three special territories that share a central government, but are independent in state affairs and economic activities. This may lead to discrepancy in wealth between the states and territories.
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Malaysia’s States And Federal Territories
Malaysia is divided into two separate parts, which are west Malaysia and east Malaysia. There are 11 states, which include Perlis, Kedah, Penang, Perak, Selangor, Negeri Sembilan, Malacca, Johor, Kelantan, Terengganu, Pahang on West Malaysia.
The remaining two states Sabah and Sarawak make up East Malaysia, separated from the mainland by the South China Sea.
Additionally, there are three special territories, which are Kuala Lumpur, the capital of Malaysia, Putrajaya and Labuan.
Which Are Malaysia’s Richest States In 2023?
According to the Department of Statistics Malaysia (DOSM), Malaysia recorded an economic growth of 3.6 per cent in 2023, having reached a total GDP of RM1.6 trillion.
On a state level, Selangor had the highest GDP of RM406.1 billion, having contributed 25.4% of the country’s economic growth. This is followed by Kuala Lumpur, Johor, Sarawak and Penang at RM249.3 billion, RM148.2 billion, RM142.2 billion and RM116.0 billion.
On the other end, Kelantan, Labuan and Perlis had the lowest GDP at RM27.6 billion, RM8.1 billion and RM6.3 billion.
| States | GDP | GDP per capita | Percentage share of country’s GDP |
| Selangor | RM406.1 bil | RM62,492 | 25.9% |
| Kuala Lumpur (inclusive of Putrajaya) |
RM249.3 bil | RM131,028 | 15.9% |
| Johor | RM148.2 bil | RM41,902 | 9.50% |
| Sarawak | RM142.2 bil | RM72,411 | 9.10% |
| Penang | RM116.0 bil | RM72,586 | 7.40% |
| Sabah | RM83.2 bil | RM31,147 | 5.30% |
| Perak | RM82.6 bil | RM37,170 | 5.30% |
| Pahang | RM64.9 bil | RM46,084 | 4.10% |
| Negeri Sembilan | RM51.9 bil | RM51,709 | 3.30% |
| Kedah | RM51.8 bil | RM26,353 | 3.30% |
| Malacca | RM46.9 bil | RM53,922 | 3.00% |
| Terengganu | RM38.2 bil | RM31,111 | 2.40% |
| Kelantan | RM27.6 bil | RM16,836 | 1.80% |
| Labuan | RM8.1 bil | RM83,596 | 0.50% |
| Perlis | RM6.3 bil | RM24,004 | 0.40% |
Source: Department of Statistics Malaysia (DOSM)
We can also look at the GDP per capita of each state, which takes the total GDP and divide it by the population to split it to a per-person allocation. GDP per capita is commonly used to measure a country’s standard of living.
Kuala Lumpur had the highest GDP per capita in 2023 at RM131,028. This is followed by federal territory Labuan and Penang state at RM83,596 and RM72,586.
On the other hand, the states Kelantan, Perlis and Kedah have the lowest GDP per capita at RM16,836, RM24,004 and RM26,353.
There are five states or territories that surpassed the national GDP per capita, which are Kuala Lumpur (RM131,028), Labuan (RM83,596), Penang (RM72,586), Sarawak (RM72,411) and Selangor (RM62,492).
What Economic Sectors Drive Each State?
The economic landscape of Malaysia is primarily driven by the services sector, which contributed 59.2% of the country’s economy. Additionally, manufacturing is the second largest contributor to the country’s economy.
These findings are reflected on the economic performance of the states and territories. Services sector is the driving force of economy growth in all states, with it contributing to around 92 per cent of Kuala Lumpur’s economic activities. Being the capital of the country, Kuala Lumpur is the main business and financial hub that draws investors.
Penang state’s economic growth is driven by the services and manufacturing sector at 48.0% and 46.5%. This may be attributed to it being the country’s leading exporter in electrical and electronic products. Around 29% of economic activities in the Johor state is in manufacturing. Several districts in Johor including Pengerang serve as base for intensive oil and gas activities including oil storage, warehousing, trading and manufacturing projects.
The economic growth of the states Sabah and Sarawak, which are rich in natural resources such as oil and gas, are also spurred by the mining and quarry sector.
Read also: How Much Do Malaysian Households Spend According To The Cities That They Live In?
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