Malaysia forecasts 3% unemployment for 2027
Services and manufacturing are expected to account for over 80% of employment opportunities as national plans support job creation.
The Ministry of Finance projects that Malaysia will maintain full employment in 2027, forecasting unemployment of 3%. In its Economic Outlook 2027 report, published before Budget 2027, the ministry expects domestic economic activity to cushion pressures from geopolitics and trade.
National plans are expected to accelerate the creation of jobs, the ministry said, with over 80% of employment opportunities coming from services and manufacturing. For the first half of 2026, establishments added more than 64,000 jobs, while close to 196,000 vacancies were recorded.
Successful hiring declined, however, falling 21% to 78,874 persons. The report said this indicated slower job matching and greater caution among businesses taking on staff as they faced continuing supply chain risks and external pressures.
The ministry anticipates a decline in low-skilled foreign workers in 2027. The 13th Malaysia Plan limits foreign workers to 10% of total employment by 2030. By contrast, expatriate employment may edge up in 2027, reflecting demand for specialist skills in advanced engineering, digital technology and green energy.
Malaysia will place more emphasis on technology adoption and capital deepening to improve productivity and reduce reliance on migrant workers, particularly through automation and digitalisation in labour-intensive industries. The ministry said higher levy structures, alongside expanded programmes for talent development and upskilling, would support local technical capacity.
