Year 2024 will likely be a cautious year overall for most Malaysian sectors, particularly the real estate sector, with the exception of the industrial real estate segment.
On his expectations for the year, 27Group’s Founder Girish Ramachandran (pic) said the Oil and Gas sector will likely experience slow growth due to pressure from the transition towards to sustainable energy and achieving decarbonisation targets.
Conversely, a number of key sectors will likely experience strong positive growth in 2024. Among these are the agrifood sector, with the Ministry of Agricultural and Food Security receiving RM 6.17 billion in under the 2024 budget allocation. Additionally, the commodities, E&E semiconductor, logistics and tourism sectors will also likely experience expansionary growth in 2024.
“While inflation is expected to moderate to about 2.7 percent in 2024, there are still uncertainties surrounding whether the cost of goods inflation will stabilise, with some concerns that overall inflation may rise 3.2 percent,” Girish said.
This is due to the government planning major subsidy reforms and associated economic changes within national frameworks. Additionally, the government has been slow to implement spending on infrastructure development projects, which will likely impede GDP growth in the country.
Furthermore, the high costs associated with improving the civil service and ensuring debt maintenance means that the government will have to propel the economy by leveraging on private funding resources.
There is presently too much arbitrary political debate surrounding many of these issues, and firm, decisive actions will be needed to propel the countries growth mechanisms positively forward.
Many of the trends in 2024 will circulate around the integration of digital and 4IR based technologies in the country, particularly within the industrial and manufacturing sectors.
The conventional costs associated with many business operations are steadily rising, requiring businesses to transition to towards more efficient operational methods in order to boost productivity output.
Malaysian companies will be compelled to expand their operations into international regions in 2024 as opportunities in Malaysia are becoming increasingly limited, due to high levels of competition.
There are also numerous trends cropping up in the country relating to social issues such as fake news, religious tensions tied in closely with the political atmosphere, as well as the increasing number of corruption cases coming under the spotlight.
Overall, it will be a cautious year ahead, as the country moves to navigate the various economic global headwinds taking place as well as engage in national economic and socioeconomic reforms.
There will also likely be a general slowdown on public sector economic machinery at the global level due to many countries having their major political elections in 2024, including the U.S., India and Indonesia.
The top global economic issues in 2024 are expected to center around the slow recovery of global GDP, high global interest rates, and fluctuating energy prices. The global GDP is forecasted to rise by 2.7%, slightly down from 2.9% in 2023, indicating a continued fiscal impact from COVID-19 and the Ukraine crisis. High global interest rates, set to remain elevated by historical standards, are likely to affect borrowing and economic growth, he expects.
Additionally, the geopolitical landscape, particularly in the Middle East, could influence energy prices, although the global economy is now better equipped to handle such shocks compared to past decades.
