Juwai IQI global chief economist Shan Saeed.
KUALA LUMPUR: Building on its strong economic performance in 2024, Malaysia is poised to maintain its growth momentum into 2025, with the gross domestic product (GDP) projected to expand by up to 6%, says an economist.
Despite global uncertainties, economists attributed Malaysia’s positive outlook to strong domestic consumption, key export sectors, sustainability efforts and its growing role as an investment hub.
Juwai IQI global chief economist Shan Saeed opined that Malaysia’s GDP could grow by 5% to 6%, assuming consumption and investment patterns will remain strong this year, thus driving macroeconomic stability.
He applauded the government’s proactive move to boost foreign and domestic direct investments (FDI), with Malaysia fast becoming a regional data centre and technological hub on top of a successful semiconductor ecosystem.
“Domestic confidence of local investors is also very strong, and that is why we are able to attract FDI to the country,” he told Bernama.Private consumption and dynamic private investment collectively contribute over 80% to the nation’s GDP.
Prof Dr Yeah Kim Leng, senior fellow and director of the Economic Studies Programme at the Jeffrey Cheah Institute on South-East Asia at Sunway University, said sustained consumer confidence, underpinned by rising incomes, low unemployment, and targeted government income support, will fuel private consumption.
“At the same time, robust private investment, which expanded by an impressive 12.1% in the first three quarters of 2024, is expected to remain a formidable growth driver,” he said.
Yeah said Malaysia is also adopting proactive measures to mitigate external headwinds, including inflationary pressures and supply chain disruptions.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said continuous expansionary fiscal policies would lead to continuous government expenditure, in addition to private sector spending to boost its productive capacity.
“Full employment status would ensure consumers maintain their positive trajectory in spending growth, although they would be more judicious about their appetite to spend given the elevated cost of living,” he said.
Mohd Afzanizam added that externally, a series of interest cuts in many parts of major economies would provide support to global demand, sustaining Malaysia’s export growth.
The International Monetary Fund had forecast Malaysia’s real GDP to grow by 4.8% this year from 4.4% in April while maintaining its projection of 4.4% growth in 2025 unchanged.
