MALAYSIA's economy is continuing its growth momentum in 2024, supported by favourable economic performance, notwithstanding persistent challenges in the external environment.
This actually signifies the country’s strong fundamentals, diversified economic activities and investor confidence in the domestic market, anchored by sound policies from the government, said the Finance Ministry.
Furthermore, in its Economic Outlook 2025 report, the central bank commented that the Madani Economy framework, which focuses on restructuring and reforming Malaysia's economic agenda, coupled with the implementation of key policy plans such as the National Energy Transition Roadmap and New Industrial Master Plan 2030, have started to yield positive results.
During the first half of 2024, the economy posted a commendable growth of 5.1%, driven by robust domestic demand, combined with further expansion in exports as well as positive growth in all economic sectors.
That said, growth is forecast to continue its momentum in the second half of the year, albeit at a moderate pace.
“Overall, real gross domestic product in 2024 is revised upward, ranging between 4.8% and 5.3%, surpassing the initial target of 4% to 5%,” said the Finance Ministry.
For 2025, it is projecting Malaysia’s economy to grow between 4.5% and 5.5%, not too different from its upgraded prediction for this year.
On the supply side, the central bank observed that the services sector continues to uphold its position as the main driver of growth, contributed by tourism activities, sustained exports and acceleration of information and communication technology (ICT) related activities.
It pointed out: “Tourism-related industries, particularly food and beverages, accommodation and retail trade segments, are expected to increase further, while the wholesale trade as well as air and water transportations segments will benefit from sustained trade-related activities.” Meanwhile, the Finance Ministry said sectors such as the utilities industry and professional services are anticipated to rise in tandem with the acceleration of ICT development, particularly in data centres.
Elaborating, it commented that the manufacturing sector in particular is projected to expand further, attributed to better performance in export-oriented industries, primarily the electrical and electronic segment, as external demand for semiconductors continues to increase.
In addition, the regulator said domestic-oriented industries are anticipated to remain favourable, in line with higher domestic consumption and investment, which are seen to remain strong in 2025.
The central bank also noted that the construction sector is expected to keep up its improvement, attributed to growth in all its sub sectors.
“Prospects for the agriculture sector remain positive supported by higher production of crude palm oil and demand from food-related industries.
“On the contrary, the mining sector is forecast to decline marginally due to scheduled plant shutdowns for maintenance purposes,” added the Finance Ministry.
On the demand side, it reassured Malaysians that growth will be buoyed by strong private sector expenditure and stable global trade.
Accounting for about 60% of the economy, the central bank said private consumption is projected to continue spearheading growth, backed by firm labour market conditions and income growth amid manageable inflation.
“Gross fixed capital formation or total investment remains high, underpinned by the realisation of private investment, acceleration of public sector strategic projects and initiatives under the government-linked Enterprises Activation and Reform Programme as well, as new and ongoing multi-year projects in the services and manufacturing sectors,” it said.
