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MALAYSIA'S economy has exceeded expectations in 2024, with the country’s Gross Domestic Product (GDP) growing by 5.1%, surpassing the government’s initial forecast of 4% to 5%.
A statement released by the Finance Ministry today revealed that in 2023, GDP growth was recorded at 3.6%.
The government also outperformed its fiscal deficit target, achieving a reduction to 4.1% in 2024, down from 5% in the previous year, and better than the projected 4.3%.
This achievement highlights the determination and confidence of the MADANI Government in revitalising Malaysia's economy, driven by progressive policies introduced under the Ekonomi MADANI framework since 2023, coupled with political stability.
Prime Minister Datuk Seri Anwar Ibrahim emphasised that this milestone was made possible through the collective efforts of both the government and industries, adding that the government is committed to deepening its economic and institutional reform agenda as Malaysia aims for even greater heights in 2025.
Anwar, who is also Finance Minister, said the key contributors to Malaysia's economic growth in 2024 include:
- Private Consumption: Up 5.1%, compared to 4.7% in 2023.
- Investments: Increased by 12%, a significant jump from 5.5% in the previous year.
- Total Trade: Expanded by 9.2%, reaching RM2.88 trillion.
- Foreign Direct Investment (FDI): Net inflows amounted to RM47.4 billion, up from RM40.4 billion in 2023.
Other economic indicators reflecting a positive outlook for 2024 include:
- Inflation: Eased to 1.8%, compared to 2.5% in 2023.
- Unemployment Rate: Dropped to 3.3%, slightly better than the 3.4% recorded in 2023, and further decreased to 3.1% by December 2024, marking the lowest rate in a decade.
He added, looking ahead to 2025, the MADANI Government has projected Malaysia's economy to grow between 4.5% and 5.5%.
Growth drivers include the global technology upcycle, accelerated infrastructure projects, and a resurgence in tourism activities.
The government also anticipates increased consumer spending due to higher minimum wages and civil servant salaries, which are expected to further stimulate the economy.
However, potential risks to growth remain, such as weaker external demand from key trading partners, rising geopolitical tensions, and protectionist measures.
In terms of fiscal management, the government’s net borrowing in 2024 slowed to RM76.8 billion, a notable decrease from RM92.6 billion in 2023.
To ensure long-term fiscal sustainability, the government is focused on key reforms, including targeted subsidy measures, enhanced revenue collection, and a stronger fiscal framework.
These reforms align with the objectives of the Public Finance and Fiscal Responsibility Act 2023 (Act 850), which aims to reduce the fiscal deficit to 3% in the medium term, ensuring the country's financial stability. – February 14, 2025
