KUALA LUMPUR (Oct 9): Malaysia expects full employment to continue into next year as robust domestic economic activity will cushion geopolitical and trade headwinds.
Unemployment rate will remain steady at 3%, according to the Ministry of Finance’s Economic Outlook 2027 report released ahead of Budget 2027. That is a level mostly considered by economists as full employment in an economy.
The implementation of various national plans will accelerate job creation with services and manufacturing sectors accounting for over 80% of the employment opportunities, the Ministry of Finance said.
Malaysia’s jobless rate remained low in the first six months of 2026, shrugging off the raging Iran War and US tariff imbroglio. During the period, establishments generated more than 64,000 new jobs and there were close to 196,000 vacancies.
However, the number of people successfully hired fell 21% to 78,874 persons, indicating moderation in job matching and cautious onboarding by businesses navigating the lingering supply chain risks and external headwinds.
The number of low-skilled foreign workers, meanwhile, is expected to decline in 2027, the Ministry of Finance said. Under the 13th Malaysia Plan, foreign workers are not allowed to exceed 10% of the total employment by 2030.
Expatriate employment, meanwhile, may increase “slightly” next year, driven by demand for specialised talents across high-growth-high-value sectors such as advanced engineering, digital technology, and green energy jobs, the ministry said.
To reduce the reliance on migrant workers, Malaysia will pay greater attention to “enhancing productivity through wider adoption of technology and shifting towards capital deepening, specifically automation and digitalisation in labour-intensive industries.”
The efforts will be complemented by higher levy structures and expanded talent development and upskilling programmes to build local technical capacity, the ministry added.