Who benefits most from the current economic growth in Malaysia?

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The Affluent Few and Those Financing Existing Assets Benefit Most from Current Economic Growth

The current economic growth in Malaysia primarily benefits the affluent few who can access wealth generated from rising market prices of existing assets, often referred to as "paper gains." Additionally, entities and individuals involved in financing the purchase of these existing assets, rather than new productive investments, also disproportionately benefit. This phenomenon diverts capital away from activities that could expand the economy's productive capacity and create broader prosperity.
"Paper Gains" Exceed Wealth from Real Investment

A significant portion of the world's newly created wealth stems from the appreciation of existing assets and financial claims, as highlighted by a McKinsey Global Institute report. These "paper gains," which were approximately twice as large in 2025 as the average between 2000-2024, are primarily accessible to a small, affluent segment of the population. In contrast, wealth generated through real investment—investment that enhances the economy's ability to produce goods and services—represented a smaller share of overall wealth creation last year.
Financing of Existing Assets Impacts Affordability

The way credit is allocated significantly influences who benefits from economic activity. When financial markets direct substantial capital towards financing the purchase of existing assets, such as housing, rather than new construction, it can lead to decreased affordability. This increased demand for a fixed supply of assets drives up prices and subsequently rents, leaving households with less disposable income for essential expenditures like healthcare and education.
The Phenomenon of "Finance Finances Finance"

A broader trend observed globally, described as "finance finances finance," suggests that financial markets are increasingly siphoning capital into speculative and extractive activities. Instead of channeling funds towards innovation, skills, and labor that increase the value of essential goods and services, this capital is used to generate profits through market fluctuations and financial intermediation. The article questions whether the Malaysian banking sector operates in a similar manner, noting a lack of detailed data on financing flows and their economic multiplier effects.

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Who benefits most from the current economic growth in Malaysia?

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