Johor's GDP share could exceed 12pct by 2030 on JS-SEZ momentum

New Straits Times

02-07-2025

KUALA LUMPUR: Johor's share of Malaysia's gross domestic product (GDP) could surpass 12 per cent by 2030 if investments in the Johor–Singapore Special Economic Zone (JS-SEZ) proceed as planned, according to CIMB Securities Sdn Bhd.
Its senior economist, Vincent Loo, said this would be accompanied by a significant rise in GDP per capita to US$15,817,compared to US$9,179 in 2023.
He said that while such an ambitious pace may be difficult to sustain, even achieving half the acceleration — bringing growth to 6.1 per cent annually — could deliver meaningful benefits.
"Based on our estimates, this would raise Johor's GDP per capita to US$13,932 by 2030 and increase Johor's share of Singapore's GDP per capita to 11.6 per cent from 10.7 per cent in 2023, compared to 13.2 per cent if Johor's economy grows 8.4 per cent annually.
"Over the longer term, continued convergence between the two economies could lift Johor's GDP per capita to 12.1 per cent of Singapore's by 2035 and 15.2 per cent should Johor's economy grow at an annual 8.4 per cent from 2025 to 2035," he added.
Johor secured RM30.1 billion in approved investments in the first quarter of this year, of which RM26.9 billion came from foreign direct investment.
Singapore emerged as the largest foreign investor, contributing RM28.3 billion across 65 projects, surpassing other major sources such as the United States (US$9.9billion) and China (US$7.9 billion).
The JS-SEZ is a central pillar of Johor's Maju Johor 2030 plan, which targets RM260 billion in GDP by 2030, nearly double the state's 2023 output of RM148.2 billion.
Loo said achieving this would require a compound annual growth rate of around 8.4 per cent annually, more than double its 3.8 per cent yearly growth between 2016 and 2023.
He added that the growth strategy focuses on high-value sectors such as electrical and electronics, life sciences, the digital economy, green energy, electric vehicles, aerospace and logistics.
"These sectors align with JS-SEZ priorities and signal a move up the value chain from Johor's traditional manufacturing base," he said.
The Economy Ministry projects that the JS-SEZ could contribute RM117.1 billion to the country's GDP by 2030, representing an average annual uplift of RM19.5 billion, equivalent to 0.6 to one per cent of GDP per year from 2025 to 2030.
Loo said the estimation assumes steady growth and a national GDP growth rate of 6 per cent.
"Key growth drivers include rising domestic and foreign investment in sectors like logistics, healthcare, tourism and the digital economy, as well as enhanced labour mobility, improved cross-border trade facilitation and major infrastructure upgrades such as Customs, Immigration and Quarantine facilities and rail links.
"Although Singapore has not issued a formal estimate, it is expected to benefit indirectly through increased offshoring to Johor, greater demand for Singapore-based services and improved access to Malaysian talent," he added.