Madani govt confident of achieving stronger GDP growth of 4-5% in 2024

KUALA LUMPUR: The MADANI Government is confident of achieving stronger Gross Domestic Product (GDP) growth of between four and five per cent in 2024 on the back of strong fundamentals and reforms mapped out in the MADANI Economy and Budget 2024.

Prime Minister Datuk Seri Anwar Ibrahim, who is also Finance Minister, said after mapping out the strategy for Malaysia’s new economic growth through the MADANI Economy framework, the government will accelerate its implementation this year to ignite new economic growth and deliver social reform and justice.

“The government is determined to further narrow the fiscal deficit to 4.3 per cent this year, in line with commitments in the Public Finances and Fiscal Responsibility Act 2023. The government has successfully reduced fiscal deficit to 5 per cent in 2023 from 5.6 per cent in 2022,” he said in a statement issued by the Ministry of Finance (MoF) today.

MoF said the MADANI Economy framework underscores the importance of reforming Malaysia’s economy to not only address systemic, historical challenges but also focus on new areas of sustainable growth and resilience.

Budget 2024, on the other hand, firmly highlights the government’s commitment to responsible fiscal management and subsidy rationalisation, the ministry said, adding that savings from these will be channelled to the vulnerable communities and the rakyat based on needs, as well as improve public infrastructure and services.

Meanwhile, MoF said, strategies and measures under the National Energy Transition Roadmap, New Industrial Master Plan 2030 and Mid-Term Review of the 12th Malaysia Plan aim to propel quality investments in high-value-added industries, especially in the energy transition, digital and high-technology industries, ultimately creating more high-income job opportunities for the rakyat.

Commenting on 2023 GDP announced today, the ministry said the Malaysian economic growth normalised to 3.7 per cent in 2023, following a strong growth registered in the previous year (2022: 8.7 per cent) and was slightly lower than the Budget 2024 forecast of about four per cent.

Despite a challenging external environment, the ministry said, Malaysia’s economy grew by three per cent in the fourth quarter of 2023 (Q4 2023), supported by resilient domestic demand that rose by 5.2 per cent in the quarter (Q3 2023: 4.8 per cent).

This helped cushion the 3.2 per cent decline in Malaysia’s trade, as exports softened on the back of cooling global demand, it said.

MoF said the growth in Q4 2023 was supported by improving economic fundamentals, among others, the labour market which registered positive growth momentum in Q4 2023, with the unemployment rate in Q4 2023 decreasing to pre-pandemic level of 3.3 per cent (Q3 2023: 3.4 per cent).

“Inflation tapered to 1.6 per cent (Q3 2023: 2 per cent), lending credence that the government’s strategy to rationalise subsidies had not caused a shock to the overall economy.

“For the month of December 2023, the headline inflation rate moderated to 1.5 per cent. This is lower than other more developed and regional economies such as the Eurozone (2.9 per cent), South Korea (3.2 per cent), the United States (3.4 per cent), the Philippines (3.9 per cent), and Indonesia (2.6 per cent),” it shared.

It also noted that net foreign direct investment amounted to RM17.1 billion in Q4 2023 (Q3 2023: RM7.2 billion).

Anwar said the continued growth in domestic demand signifies that the MADANI Government’s reform agenda is starting to yield positive results.

“Aside from the ongoing fiscal restructuring, which mutually benefit the government and the rakyat, efforts to enhance governance and ease of doing business have stimulated economic activities and progressively restored investor confidence in Malaysia,” he added. – BK