Finance Minister II Amir Hamzah Azizan - Photo: ST
KUALA LUMPUR: Malaysia’s economy is expected to sustain steady growth in 2025 of above 5%, supported by strategic investment, robust fiscal management and economic resilience, says the Finance Ministry.
Finance Minister II Datuk Seri Amir Hamzah Azizan highlighted Malaysia’s gross domestic product (GDP) growth surpassed expectations last year, with the economy exceeding both initial budget targets and Bank Negara’s projection.
“I think we had a great year last year. This year, I think the tailwinds will still continue. I think we have a good base because foreign direct investment (FDI) remains strong, and a lot of the activity that’s generated is now playing out in the economy.
“Despite the choppiness in the global market, we have enough resilience to ride through it. This year, we will stay above 5%,” he said in an interview with Bloomberg’s Haslinda Amin.
An open trading nation
Amir Hamzah stressed that Malaysia remains steadfast in advocating open markets despite shifts in global trade dynamics.
“Malaysia is an open trading nation, and effectively, what we want is an open market for everybody to participate in. We do not like to choose sides, and I think we have been able to navigate a lot of economic positions over the past years and prove that we are a fairly open economy.
“Despite there may be a much tougher stance along the way, the diversity of the Malaysian economy itself provides resilience along the way,” he said.
Amin Hamzah pointed out that Malaysia has a resilient economic base, ranging from commodities to manufacturing, services and high-tech industries like the electrical and electronics (E&E) sector, as well as semiconductors.
Additionally, he said data centres are also adding to Malaysia’s economic complexity.
While geopolitical tensions and potential external policies introduced under US President-elect Donald Trump may pose risks to Malaysia, Amir Hamzah expressed hope for continued principles of free trade.
“The principles of free trade have helped the world to grow into a much better form, and I am hopeful that we will get and be able to get people to understand that Malaysia is positioned as an open trading nation, and we will continue to be supportive of this way forward for Malaysia,” he said.
Ringgit’s stability
The ringgit strengthened by nearly 3% in 2024, emerging as one of Asia’s best-performing currencies.
Amir Hamzah attributed the growth to strong FDI inflows, domestic investments, and strategic interventions by government-linked investment companies (GLICs).
“We got some help from our GLICs in terms of supporting government initiatives.
“When they had excess profits, they brought it back. So that created demand for the ringgit along the way. But it was not the primary driver of why we did it. It helped cushion blows along the way.
“The second thing was making sure that as long as we can generate a lot of FDIs coming in, and we can generate a lot of interest coming in, investments coming in, then the demand for ringgit actually helped,” he added.
The Johor-Singapore Special Economic Zone (JS-SEZ) is a testament to Malaysia and Singapore’s shared vision of complementing each other’s strengths to drive economic progress, he said.
Amir Hamzah highlighted that the JS-SEZ represents years of collaborative effort between Malaysia and Singapore to align policies, streamline infrastructure and create a conducive environment for investment growth.
“I think it’s important to recognise this was not an overnight thing. It’s been something that both countries have been focused on; building alignment because the most important thing is to align, to agree that this is possible.
“Therefore understanding the complexities of making it work, what facilitation we can do, and the facilitation could be in terms of agreeing on priority investments that need to be done. We try to get the alignment done so that it paves the way for the next stage,” he said.
Malaysian Prime Minister Datuk Seri Anwar Ibrahim and his Singapore counterpart Lawrence Wong witnessed the signing of the JS-SEZ agreement during the 11th Malaysia-Singapore Leaders’ Retreat in Putrajaya on Jan 7.
The JS-SEZ is set to play a pivotal role in driving growth and creating jobs in 2025 as it is expected to contribute US$26bil to Malaysia’s gross domestic product and create 100,000 skilled jobs.
Amir Hamzah highlighted Malaysia’s track record in talent development, pointing to the growth of the E&E sector since the 1970s as an example.
“Over the years, we’ve added in vocational education and tertiary training. It has created a robust talent pipeline. Now we’re trying to migrate that in terms of the same methodology into a JS-SEZ sort of methodology, and we’re putting in incentives to allow facilitation.
“So if you see the knowledge worker incentives that we have put in, (such as) a lower tax rate to attract knowledge workers to come to Malaysia, this will facilitate accelerated growth along the way,” he said.
JS-SEZ is strategically zoned to focus on sectors like logistics, manufacturing, digital services, leisure, and tourism with tailored incentives designed to attract targeted investments, and coalescing ecosystems to maximise economic impact.
Amir Hamzah pointed out that Malaysia’s enhanced infrastructure, including improved road and rail connectivity and the ongoing Rapid Transit System project, is set to support the special economic zone’s rapid development and integration. — Bernama
