RESEARCH REPORT

MACRO UPDATE: THE STATE OF JOHOR - 2020 - FULL REPORT

Report ID 605265 Popularity 529 views 24 downloads 
Report Date Oct 2020 Product  
Research Type Economic Research Country Sector Country Report - Country Report
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Rationale
Johor, Malaysia’s second-largest state and among the most developed, is known as the Southern Gateway of Malaysia due to its proximity to Singapore. Its economy was one of the fastest growing in Malaysia with a median real GDP growth of 5.8% y-o-y between 2015 - 2019. Its intrinsic strength is underpinned by its large, resilient and diversified economy, strong fiscal management and low debt. 

Johor is Malaysia’s largest manufacturing hub and is among the country’s top three favourite investment destinations. This is not surprising because sustained investment in the logistics and manufacturing sectors have continued to boost its potential as an alternative to Singapore. Meanwhile, the revival of large infrastructure projects such as the Kuala Lumpur-Singapore high-speed (HSR), Johor Bahru–Singapore Rapid Transit System (RTS) and Bandar Malaysia are positive developments for the state.  

Johor has a good track record of prudent fiscal management. In the post-Global Financial Crisis period, it managed to churn out fiscal surpluses or at least keep the state budget balanced. In other words, state expenditure has always been within budget. In terms of debt, Johor has one of the lowest gross debt-to-GDP ratios, just behind Penang and Selangor. Its debt repayment capability is also solid given that its revenue and cash reserves are more than sufficient to cover its debts. 

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