Juwai IQI global chief economist Shan Saeed opined that Malaysia’s GDP could grow by 5-6% this year assuming consumption and investment patterns remain strong, thus driving macroeconomic stability, Bernama reported.
He applauded the government’s proactive move to boost foreign and domestic investment and said Malaysia was fast becoming a regional data centre and technological hub on top of a successful semiconductor ecosystem.
“Local investors’ confidence is also very strong, and that is why we are able to attract foreign direct investment (FDI) to the country,” he told the national news agency.
Private consumption and investment collectively contribute over 80% to the nation’s GDP.
Other economists agreed that despite global uncertainties, Malaysia has a positive economic outlook in 2025 due to strong domestic consumption, increased exports, and its growing role as an investment hub.
Malaysian Economic Association president Yeah Kim Leng said sustained consumer confidence, underpinned by rising incomes, low unemployment, and targeted government income support, will fuel private consumption.
“At the same time, robust private investment, which expanded by an impressive 12.1% in the first three quarters of 2024, is expected to remain a formidable growth driver,” he said, according to Bernama.
Yeah said Malaysia is also adopting proactive measures to mitigate external headwinds, including inflationary pressures and supply chain disruptions.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said continuous expansionary fiscal policies would lead to increased government expenditure and private sector spending.
Afzanizam said that while consumer spending is expected to maintain a positive trajectory, they would likely be more judicious given the elevated cost of living.
He said that externally, a series of interest cuts in many major economies would provide support to global demand, sustaining Malaysia’s export growth.
The International Monetary Fund (IMF) forecasted Malaysia’s GDP to grow by 4.8% in 2024 and 4.4% in 2025.
Globally, the economy is expected to grow by 3.2% in 2025, while Asean growth is forecast to be at a robust 4.7% thanks to export opportunities generated by Chinese and US tariffs.
Last November, Prime Minister Anwar Ibrahim said the economy’s robust performance in the third quarter of last year (Q3 2024) puts the country on track to achieve the government’s official forecast range of 4.8-5.3% GDP growth for 2024.
In a statement, the finance ministry also said the 5.3% Q3 2024 GDP growth brought Malaysia’s economic growth for the first nine months of 2024 to 5.2%, compared with 3.8% for the same period in 2023.
GDP grew by 4.2%, 5.9% and 5.3% in the first, second, and third quarters of 2024 respectively.
The Q4 2024 and full year GDP results are scheduled to be released on Feb 14.