Malaysia's economy in Q4 beats expectations - economists

KUALA LUMPUR: Malaysia's economy has shown remarkable resilience as the gross domestic product (GDP) growths for the fourth quarter of 2024 as well as the full year surpass advance estimates, economists said.

The country's GDP grew faster than expected at five per cent in the fourth quarter of 2024, above both an official advance estimate and analysts' forecast in a Reuters poll of a 4.8 per cent expansion, amid strong domestic demand and a recovery in exports.

This brings the full-year growth to 5.1 per cent, faster than the 3.6 per cent recorded in 2023, according to Bank Negara Malaysia.

The Q4 growth, however, was slower than the 5.4 per cent expansion in the third quarter.

"Growth was weighed down by contraction in the commodities sector following lower oil palm output as well as the continued decline in oil production," the central bank said in a statement today.


Bank Negara governor Datuk Seri Abdul Rasheed Ghaffour said economic growth this year will be driven by robust expansion in investment activity, resilient household spending and expansion in exports".

The government and Bank Negara have forecast the economy will grow between 4.5 per cent and 5.5 per cent in 2025.

Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid said both domestic demand and the external sector have played vital roles in sustaining growth, reflecting the robustness of the Malaysian economy.

"For the whole of last year, Malaysia's GDP growth stood at 5.1 per cent from 3.6 per cent previously. The Malaysian economy was growing at a respectable rate last year and this should serve as the foundation for this year's growth," Afzanizam told the Business Times.

Afzanizam attributed Malaysia's economic resilience to expansionary fiscal policies, supportive monetary conditions and Bank Negara's effective handling of inflation.

He noted the inflation rate had dropped from 3.3 per cent in 2022 to 2.5 per cent in 2023, and further moderated to 1.8 per cent in 2024.

"The central bank's decision to raise the Overnight Policy Rate (OPR) from 1.75 per cent to 3.00 per cent between 2022 and 2023 was instrumental in steering inflation to a more sustainable level,' he added.

UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research Mohd Sedek Jantan said the firm expects domestic spending to continue growing supported by a healthy labour market.

Mohd Sedek added that the government's stimulus measures, including cash assistance, subsidies, and increased access to flexible retirement funds, would help further stimulate consumption.

"Furthermore, income boosts from pay hikes for civil servants in December 2024 and January 2026 should support household spending," he said.

Mohd Sedek said for 2025, economic momentum is projected to remain strong, underpinned by resilient domestic consumption, robust investment expansion, and sustained export growth.

Despite this positive economic trajectory, he said the outlook for 2025 is not without uncertainties.

"Chief among them are escalating geopolitical risks and the potential for trade disruptions. Our early estimate for Malaysia's GDP growth in 2025 stands at 4.8 per cent," he added.

Bank Negara said during the fourth quarter, growth was mainly driven by stronger household spending, reflecting favourable labour market conditions, policy measures to support households and healthy household balance sheets.

This is backed by strong investment approvals and further progress of multi-year projects by the private and public sectors.

This includes catalytic initiatives under national master plans (i.e. New Industrial Master Plan, National Energy Transition Roadmap, and National Semiconductor Strategy) provided further impetus to investment growth.

On the external front, exports recovered amid steady global growth, continued tech upcycle as well as higher tourist arrivals and spending.

This provided support to the current account, leading to a continued surplus of 1.7 per cent of GDP in 2024 (1.5 per cent in 2023).

During the quarter, headline inflation edged lower to 1.8 per cent (Q3 2024: 1.9 per cent).

Lower inflation was observed for mobile communication services and RON97 petrol which was partially offset by higher inflation in other food-related items, particularly fresh vegetables and fish and seafood.

Core inflation was lower at 1.7 per cent (Q3 2024: 1.9 per cent), driven largely by the moderation in inflation for mobile communication services which declined by 10.0 per cent (Q3 2024: 0.0 per cent).

Bank Negara said the share of Consumer Price Index items recording monthly price increases remained below the long-term average of 39.8 per cent (Q3 2024: 38.9 per cent; Q4 2011-2019: 41.7 per cent).

For 2024 as a whole, both headline and core inflation declined to 1.8 per cent (2023: 2.5 per cent and 3.0 per cent respectively).

https://www.nst.com.my/business/economy/202...ions-economists

boosted by epf 10 billion. 2025 is game over.

Finance Ministry: RM10.78b withdrawn from EPF Account 3 as at Sept 30
https://www.malaymail.com/news/malaysia/202...-sept-30/158743

This post has been edited by Phoenix_KL: Feb 16 2025, 07:26 PM

So much words but so little substance??

my salary still same. things getting pricier

i don't see any effect ..

No wonder ayam feel so lich and suksesful, ohh wait.....

CPI is lower means people not spending. If you read our PMI index is very scary. Every month is decline. It has been below 50.0 for many months already. The problem is why Malaysia and Indon have this problem. Our neighbor like Singapore, Vietnam, Thailand even Philip is above 50.0.

All these news means jack shietz... if EPF is below 6pct...

CPI tracks inflation tho..

Rokek say inflation still low only 1.7%

Dengar boleh percaya jangan

- Walaun

CPI continued lower every month is not healthy.

Yea, businesses like fnb kinda slow lately. Can see some restaurants, slashing price to get customers

Orientalgopi and zus says no