Malaysia’s Economy Grows 5.1% in 2024
Strong Performance Driven by Domestic Demand and Rebound in Exports
The Malaysian economy grew by 5.1% in 2024, exceeding the government’s target of 4.8% to 5.3% year-on-year. The strong performance was driven by continued expansion in domestic demand and a rebound in exports.
Domestic Demand
The growth was mainly driven by stronger household spending, reflecting favourable labour market conditions, policy measures to support households, and healthy household balance sheets. Strong investment approvals and progress on multi-year projects by the private and public sectors also contributed to the growth.
Investment Activity
In addition, strong investment approvals and further progress on multi-year projects, including catalytic initiatives under national master plans such as the New Industrial Master Plan, National Energy Transition Roadmap, and National Semiconductor Strategy, provided further impetus to investment growth.
External Front
On the external front, exports recovered amid steady global growth, a continued tech upcycle, and higher tourist arrivals and spending. These supported the current account, leading to a continued surplus of 1.7% of gross domestic product (GDP) in 2024, up from 1.5% in 2023.
Fourth Quarter Performance
For the fourth quarter of 2024 (4Q 2024), GDP expanded by 5.0% (3Q 2024: 5.4%), driven mainly by domestic demand.
Supply Side
On the supply side, growth was driven by expansion in the services sector, with increased support from both consumer-related and business-related subsectors. The manufacturing sector was supported by the electrical and electronics (E&E) and primary-related clusters, while the construction sector continued to record double-digit growth with robust activities in the residential, non-residential, and special trade subsectors.
Challenges and Opportunities
However, growth was weighed down by contraction in the commodities sector following lower oil palm output and the continued decline in oil production. The growth outlook remains subject to downside risks, such as an economic slowdown in major trading partners, the heightening risk of trade and investment restrictions, and lower-than-expected commodity production. Nevertheless, potential upside to growth includes greater spillovers from the tech upcycle, more robust tourism activities, and faster implementation of investment projects.
Conclusion
In conclusion, Malaysia’s economy recorded a strong performance in 2024, driven by continued expansion in domestic demand and a rebound in exports. The government’s policy measures and initiatives to support households and businesses have contributed to the growth.
FAQs
* What was the growth rate of Malaysia’s economy in 2024?
+ 5.1%
* What drove the growth in 2024?
+ Continued expansion in domestic demand and a rebound in exports
* What were the key drivers of domestic demand?
+ Stronger household spending, favourable labour market conditions, and policy measures to support households
* What were the key drivers of exports?
+ Steady global growth, a continued tech upcycle, and higher tourist arrivals and spending
* What were the challenges and opportunities facing the economy?
+ Downside risks include an economic slowdown in major trading partners, trade and investment restrictions, and lower-than-expected commodity production, while upside potential includes greater spillovers from the tech upcycle, more robust tourism activities, and faster implementation of investment projects.