Authorities and stakeholders are optimistic about Malaysia’s economic resiliency, noting that support will be in the form of robust domestic demand, reflecting the implementation of various measures such as the Ekonomi Madani, New Industrial Masterplan 2030, National Energy Transition Roadmap and the review of the 12th Malaysia Plan.
The government posted a slightly more upbeat range forecast for 2024 of a GDP growth at 4.0–5.0% Year-On-Year (yoy) versus ‘approximate 4.0%’ for 2023, cited CGSCIMB today (Oct 16).
On a percentage yoy basis, nearly all demand-side components are forecast to record higher growth in 2024 with consumption at 5.7% yoy (2023: 5.6%), investment at 5.4% yoy (2023: 4.3%) and exports at 4.1% yoy (2023: -6.2%).
The research firm said the government has assumed that private consumption will be supported by the cash transfers as an offset to the targeted subsidy implementation.
On investments, the private sector is estimated to react positively towards the announcements of various policy measures announced recently, whereas the public sector will continue to be supported by robust development expenditure spending.
Similarly, by major economic activity, all major segments are projected to record higher growth. The steepest growth is projected to come from the construction sector (6.8% yoy; 2023: 6.3%), bolstered by infrastructure and utilities projects as well as construction of non-residential buildings amid an emphasis on greater investment growth.
Services comes second, in CGSCiMB’s view, with growth at 5.6% yoy (2023: 5.5%), driven by vibrant tourism-related activities as well as resilient consumer activities.
This is followed by the manufacturing sector (4.2% yoy; 2023: 1.4%), driven by a global demand recovery, especially in the electrical & electronics segment.
Growing at 2.7% yoy, the mining sector is poised to pose a turnaround from -0.8% in 2023, driven by higher output in a few fields.
Finally, agriculture is expected to improve by 1.2% yoy (2023: 0.6%), helped by improving labour conditions as well as expected minimal impact from El Nino.
With regards to Malaysia’s balance of payments, the government is projecting a narrower current account surplus of 3.2% of GNI in 2024 vs. 3.4% of GNI in 2023.
The goods account is expected to record a larger surplus owing to better global trade environment, while improved tourism-related activities to lend support to narrowing the services deficit.
On the other hand, the primary income account may see a larger outflow due to greater payments by foreign investors in tandem with expected strong investment activities. Similarly, outflows in the secondary income account may widen amid a larger number of foreign workers, CGSCIMB added.
