KUALA LUMPUR, Oct 6 — The target gross domestic product (GDP) of RM3.4 trillion in the Shared Prosperity Vision 2030 (WKB 2030) was calculated based on nominal or current prices that take into account the effects of inflation, says the Economic Affairs Ministry.
It said to meet the target of RM3.4 trillion in 2030, the GDP has to grow 4.7 per cent annually at constant prices between 2018 and 2030 with the average inflation rate at 2.3 per cent for the period.
“In other words, the GDP target of RM3.4 trillion can be achieved with nominal prices growing seven per cent for the period from 2018 to 2030,” it said in a press statement today.
WKB 2030, which was launched yesterday, clearly differentiates the two measurements, in line with the statement by Minister Datuk Seri Mohamed Azmin Ali after the launch of WKB 2030 yesterday
WKB 2030 sets out one of the directions for the nation to confront the various challenges in the coming decades and it is important for all quarters to unite and focus on the same objective so that all levels of society can achieve the eagerly anticipated prosperity and success, he said.
GDP can be measured in nominal/current prices and constant prices.
GDP measured in nominal or current prices takes into account the effects of inflation, while GDP in constant prices does not account for inflation—it accounts for the fact that if prices change but output does not, nominal GDP would change.
GDP is usually stated in nominal prices while the GDP growth rate is stated in constant prices.
The ministry was rebutting claims by former prime minister Datuk Seri Najib Tun Razak that Putrajaya’s nominal GDP calculation is wrong.
If we want to hit the target GDP of RM3.4 trillion over the 12-year period from 2018 to 2030, we would need a GDP growth rate of 7.36 per cent and not 4.7 per cent, which would only yield a GDP of RM2.53 trillion in 2030 and not achieve the target of RM3.4 trillion, he said. — Bernama
