Malaysia’s 2024 Economic Performance: Resilience Amid Global Risks and Optimism for 2025
- simpleisgd
- Feb 15
- 2 min read
Malaysia’s economy displayed impressive growth in 2024, expanding by 5.1%, driven by strong domestic demand, robust investment, and a rebound in exports. While the year showed resilience despite global challenges, the outlook for 2025 remains cautiously optimistic, with key risks such as geopolitical tensions and trade uncertainties lingering.
Economic Growth:
Malaysia’s economy grew by 5.1% year-on-year in 2024, aligning with official estimates (4.8% to 5.3%). This represents a recovery from 2023's revised growth rate of 3.6%.
Inflation:
Headline inflation eased to 1.8% in Q4 2024, slightly down from 1.9% in Q3.
Core inflation moderated to 1.7%, compared to 1.9% in the previous quarter.
Full-year inflation averaged 1.8%, lower than 2023’s 2.5% headline and 3% core inflation.
Domestic policy reforms may exert upward pressure on prices, but overall inflation is expected to remain manageable.
Fourth Quarter Performance:
GDP grew by 5% year-on-year in Q4 2024, surpassing expectations (official estimate: 4.8%).
Growth in Q4 slowed slightly from 5.4% in Q3.
On a quarter-on-quarter basis, the economy contracted by 1.1%, down from a 1.9% expansion in Q3.
Key Growth Drivers:
Domestic Demand: Resilient household spending, strong investment activity, and continued business activity were central to growth.
Sectoral Performance:
The services sector led the growth, supported by consumer and business services.
The manufacturing sector continued to expand, especially in electrical and electronics, as well as primary-related industries.
Bank Negara’s Outlook:
Governor Abdul Rasheed Ghaffour expressed confidence in Malaysia’s economic fundamentals, noting strong investment growth, resilient household spending, and improving exports.
External Risks:
Global uncertainties such as economic slowdowns in major trading partners, trade restrictions, and fluctuating commodity prices pose risks to growth.
Potential Upsides:
A tech sector upcycle, growing tourism, and accelerated investment projects could support further growth.
2025 Economic Outlook:
Key Drivers: Continued domestic demand, household spending, and investment momentum.
Risks:
Rising protectionism, geopolitical tensions, and global supply chain uncertainties could dampen growth.
Declining imports and lower export orders indicate potential moderation.
Malaysia’s trade surplus with the US (US$15.9 billion in 2024) could attract sector-specific tariffs under new US trade policies.
Trade Relations:
Strengthening ties with trade blocs like BRICS and ASEAN could help mitigate global risks and uncertainties.
Overall, Malaysia’s economy in 2024 demonstrated strength and resilience, overcoming external risks and benefiting from solid domestic demand. While uncertainties persist, particularly in global trade and geopolitics, the nation’s economic fundamentals remain strong. Looking ahead, Malaysia’s ability to navigate these challenges, alongside growing sectors like technology and tourism, will be crucial in sustaining growth into 2025.
