PETALING JAYA: Malaysia’s gross domestic product (GDP) growth rate is projected to rise to 4.7% in 2024, supported by the recovery in external trade and sustained development in domestic demand, said MIDF Research.
Its director and head of strategy Imran Yassin Yusof said positive job market conditions, income growth, and continued recovery in the tourism sector would also support the domestic spending outlook.
“Moreover, stabilisation of monetary policy in major countries, a stronger recovery in China, and supportive global commodity prices are expected to boost Malaysia’s external front in 2024,” he said at the “2024 Market Outlook Presentation: Cruising Along” today.
In addition, he said the research firm is cautiously optimistic about the economic and equities market growth prospect for 2024, albeit at a steady pace, with many of the factors that influenced 2023, such as inflation and interest rates, seeming to have waned.
Imran also said commodity prices are expected to remain stable, with forecasts for both crude palm oil and Brent oil prices to average RM3,600 per tonne and US$84 (RM392.74) per barrel, respectively, for next year.
“The domestic economy is expected to be anchored by continuous steady consumer spending, busier tourism-related activities, and construction of infrastructure projects.
“Malaysia’s job market remains in good shape as reflected by the continuous growth in employment, as there is a decline in unemployment and lower jobless rate,” he said.
However, he stated that the inflation rate would likely hover above 3% next year amid the roll-out of targeted fuel subsidies.
Real wage growth is anticipated to remain in positive territory even though the inflation rate is forecasted higher due to subsidy rationalisation efforts, he said.
In terms of the global economy, Imran said growth in 2024 would remain moderate, below the average of 3.8% recorded during the 2010-2019 period.
“As it will be constrained by several downside risks, including the policy tightening by central banks to tackle inflation and geopolitical risks.
“While global production activities could pick up, recovering from the lows this year, consumer spending will remain a key factor to support growth next year on the back of easing inflation, healthy labour market, and rising income,” he pointed out.
For trading countries, he noted that growth prospects would be more encouraging in 2024.
“Mainly benefitting from the recovery in global production and trade activities but potentially limited by the expected slowdown in demand from the advanced economies.
“The factor of US rate hikes will likely dissipate in 2024,” he said.
Moreover, MIDF said it expects that the recovery of China’s economy will continue into 2024, supporting the recovery of Malaysia’s external trade.