Malaysia’s real GDP to rise 4.3% in 2024 on higher global export demand

SINGAPORE: Malaysia’s real gross domestic product (GDP) is expected to grow 4.3 per cent in 2024, up from the 4.0 per cent growth expected for 2023.

This would mainly be driven by higher global export demand, particularly from the technology sector, according to the International Monetary Fund (IMF).

IMF’s Asia Pacific regional studies division chief Shanaka (Jay) Peiris said Malaysia is a very open economy, especially in the export of electrical and electronics (E&E) products.

“We expect the global economy and export demand to gradually recover, particularly for the technology sector to pick up too next year, and that will add to the 3 (per cent) or higher growth we have in Malaysia towards next year,” he told a press conference in conjunction with the release of the IMF Regional Economic Outlook (REO) for Asia and Pacific report here today.

On Malaysia’s inflation, he said it has been gradually slowing but the subsidy reforms tabled in Budget 2024 would pose some risks to that.

Nonetheless, he reckons that the subsidy reforms would be a “one-off” event and that it would be unnecessary for additional measures from Bank Negara Malaysia (BNM).

“It will still depend on how the inflation comes around, the impact of subsidy reforms as well as the external environment and interest rate differentials (compared with US interest rates),” he said.

Shanaka said the IMF’s recommendation for Malaysia in the last report showed that the monetary policy should be restrictive enough to bring the inflation down towards the 2-3 per cent range over the medium term.

“At the moment, we have seen interest rates raised, and that inflation has been gradually coming down right now. So in that sense, we think that a maintained restrictive stance should help bring down inflation,” he said. – BK