MARC expects 2024 GDP to grow 4.0-5.0%, manufacturing the key driver

KUALA LUMPUR: Malaysian Rating Corporation Bhd (MARC) expects Malaysia’s 2024 real gross domestic product (GDP) to grow between 4.0 per cent and 5.0 per cent, with the manufacturing sector as the key driver.

The company said the manufacturing sector is projected to expand by 4.2 per cent (2023: 1.4 per cent).

Concurrent with the government’s recent introduction of industrial and economic blueprints, including the Chemical Industry Roadmap 2030, the National Energy Transition Roadmap (NETR), and the New Industrial Master Plan 2030 (NIMP), Budget 2024 aims to further develop the high-growth and high-value (HGHV) areas of the manufacturing sector amid concerns over premature deindustrialisation, MARC said in a statement today.

Initiatives such as a tiered reinvestment tax allowance, a visa liberalisation plan for investors, industry recognition for Technical and Vocational Education and Training (TVET), and the development of a new high-tech industrial area for electrical and electronic (E&E) products will facilitate the HGHV aspiration.

“Over time, it is crucial that the multiple plans remain focused and achievable, to ensure expectations are met. The government’s overarching plans provide valuable direction for the economy but should also aim to reduce coordination and administrative complexities for both the public and private sectors,” MARC said.

Concurrent with its development goals, MARC said Malaysia remains committed to boosting real productivity by expanding automation tax incentives, encouraging the substitution of foreign labour with technology, fostering entrepreneurship, advancing human capital in catalytic fields and investing in infrastructure.

This commitment extends to RM11.8 billion allocated to flood mitigation projects, as well as various transportation upgrades and specific allocations for tourism in preparation for Visit Malaysia 2026, MARC said.

“Contingent on the execution of development blueprints and committed fiscal policy improvements in due time, Budget 2024 is a progressive step towards achieving quality GDP growth in Malaysia and driving further socioeconomic development amid a challenging period,” it said.

On Oct 13, Prime Minister Datuk Seri Anwar Ibrahim tabled Budget for 2024, the largest on record with an allocation of RM393.8 billion (Budget 2023: RM388.1 billion), albeit slightly lower than the spending amount for 2023 estimated at RM397.1 billion. – BK