Prime Minister and Finance Minister, Datuk Seri Anwar Ibrahim has announced today (Feb 16) that Malaysia’s economy demonstrated resilience, posting a growth of 3% in the fourth quarter of 2023 (Q4 2023). This growth was supported by strong domestic demand, which rose by 5.2% in Q4 2023, cushioning the impact of a 3.2% decline in trade due to softer global demand for exports.
Overall, Malaysia’s economic growth normalised to 3.7% in 2023, slightly lower than the forecast of approximately 4% outlined in the Belanjawan 2024. Despite this, the growth in Q4 2023 was buoyed by improving economic fundamentals, including positive momentum in the labor market and a decrease in the unemployment rate to pre-pandemic levels of 3.3%.
Furthermore, inflation moderated to 1.6% in Q4 2023, suggesting that the government’s strategy to rationalise subsidies did not cause a shock to the overall economy. Headline inflation for December 2023 was recorded at 1.5%, lower than several other developed and regional economies.
Net foreign direct investment (FDI) surged to RM17.1 billion in Q4 2023, indicating growing investor confidence in Malaysia’s economy.
Prime Minister and Finance Minister, Datuk Seri Anwar Ibrahim, attributed the continued growth in domestic demand to the reform agenda of the MADANI Government. He highlighted efforts to enhance governance and ease of doing business, which have stimulated economic activities and restored investor confidence.
Looking ahead, the MADANI Government aims to accelerate the implementation of economic reforms in 2024 to ignite new economic growth and deliver social reform and justice. With a focus on the Ekonomi MADANI framework, the government is confident of achieving stronger growth between 4% to 5% in 2024. Measures under the National Energy Transition Roadmap, New Industrial Master Plan 2030, and Mid-Term Review of the Twelfth Malaysia Plan aim to drive quality investments in high-value-added industries, creating more high-income job opportunities for the rakyat.
In line with commitments in the Public Finances and Fiscal Responsibility Act 2023, the government is determined to further narrow the fiscal deficit to 4.3% this year. Savings from responsible fiscal management and subsidy rationalization will be channeled towards improving public infrastructure and services, as well as supporting vulnerable communities.
The Ministry of Finance Malaysia has outlined these initiatives as part of Malaysia’s economic strategy to address systemic challenges and foster sustainable growth and resilience.
