Prime Minister Datuk Seri Anwar Ibrahim led MADANI government is confident of achieving a stronger Gross Domestic Product (GDP) growth of between 4 percent and 5 percent in 2024 supported by a strong foundation and the reforms outlined in the MADANI Economy and Budget 2024.
Prime Minister Datuk Seri Anwar Ibrahim, who is also the Finance Minister, said following the mapping of Malaysia’s new economic growth strategy through the MADANI Economy framework, the government will speed up its implementation this year to stimulate new economic growth and realize reforms and social justice. “The government is determined to continue reducing the fiscal deficit to 4.3 percent this year, in line with the commitment in the Public Finance and Fiscal Responsibility Act 2023. “The government has succeeded in reducing the fiscal deficit to 5 percent in 2023 from 5.6 percent in 2022,” he said in a statement issued by the Ministry of Finance.
According to the MoF, the so called MADANI economics emphasises the importance of reforming Malaysia’s economy not only to address systemic challenges that have been rooted for a long time but also to focus on areas of sustainable and resilient growth. The 2024 budget emphasizes the government’s commitment to responsible fiscal management and the retargeting of subsidies, he said. Anwar added the savings from the measure can be channeled as aid to the vulnerable and in need and improve infrastructure and public services. Meanwhile, the Ministry stated the strategies and initiatives under the National Energy Transition Roadmap, the New Industrial Master Plan 2030 and the Half-Term Review of the Twelfth Malaysia Plan will drive quality investment in high-value-added industries, especially in high-tech, energy transition and digital industries as well as further creating more high-income job opportunities for the people.
On the 2023 GDP that was announced, he said the national economy had returned to normal with growth of 3.7 percent in 2023 following the strong growth recorded in the previous year (2022: 8.7 percent)
The overall growth in 2023 is slightly lower compared to the 2024 Budget projection which is around 4 percent. Despite the challenging external environment, MOF said the country’s economy had recorded growth of 3 percent in the fourth quarter of 2023, supported by resilient domestic demand that increased by 5.2 percent in the quarter (third quarter of 2023: 4.8 percent). This increase helped offset the 3.2 percent decline in foreign trade following a drop in exports following low global demand. The fourth quarter growth was supported by an improvement in economic fundamentals, which included the labor market recording positive growth momentum with the unemployment rate decreasing to the pre-pandemic level of 3.3 percent in the fourth quarter of 2023 (third quarter of 2023: 3.4 percent).
This rate is lower than other developed and regional economies such as the Euro Zone (2.9 percent), South Korea (3.2 percent), the United States (3.4 percent), the Philippines (3.9 percent) and Indonesia (2.6 percent),” he said. He said net foreign direct investment was recorded at RM17.1 billion in the fourth quarter of 2023 (third quarter of 2023: RM7.2 billion). Anwar said the continued growth of domestic demand shows that the MADANI Government’s reform agenda is beginning to yield positive results.
“Apart from continuous fiscal restructuring that benefits the government and the people, efforts to improve governance and simplify business affairs have stimulated economic activity, further restoring investor confidence in Malaysia,” he said.
