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16-02-2025
KUALA LUMPUR: Malaysia’s economy grew 5.1 percent in 2024, as strong domestic demand and investment offset a downturn in the commodities sector, according to the Southeast Asian country’s central bank. Gross domestic product (GDP) expanded 5 percent in the October-December quarter, Bank Negara Malaysia said on Friday, down from 5.3 percent growth in the third quarter but ahead of an advance estimate of 4.8 percent.
The year on year performance marked a significant jump from GDP growth of 3.7 percent in 2023.
“Going forward, while the global environment could be challenging, growth of the Malaysian economy will be driven by robust expansion in investment activity, resilient household spending and expansion in exports supported by Malaysia’s strong economic fundamentals,” Bank Negara Malaysia Governor Abdul Rasheed Ghaffour said.
Bank Negara Malaysia said that inflation dropped to 1.8 percent in 2024, down from 2.5 percent the previous year.
The Malaysian ringgit appreciated 2.7 percent against the US dollar, the central bank said, and also gained against the Singapore dollar, South Korean won and Japanese yen. Bank Negara Malaysia said that the economic outlook was subject to the risk of slowing growth in Malaysia’s trading partners amid a heightened threat of trade restrictions and weaker commodities production.
“Nevertheless, potential upside to growth includes greater spillovers from the tech upcycle, more robust tourism activities and faster implementation of investment projects,” the central bank said.
In 2020, Malaysia’s economic contraction quickened again in the fourth quarter, as a fresh virus wave late in 2020 helped drive the economy to its worst annual showing since the Asian financial crisis.
Gross domestic product shrank 3.4% in the fourth quarter from a year earlier, its third straight contraction and a deeper decline than the -3.1% figure analysts surveyed by Bloomberg were expecting. The economy contracted 5.6% for all of 2020, its worst performance since 1998 and below the government’s projection of -3.5% to -5.5%.
The data are “an undoubtedly downbeat print to end the year of 2020 on a challenging note,” said Wellian Wiranto, an economist at Oversea-Chinese Banking Corp in Singapore. With difficulties continuing into the early part of this year, “the market would inadvertently see today’s GDP data as one big signal that Bank Negara Malaysia may have to ease in March rather than wait for any more ‘confirmatory’ data.”
Central bank governor Nor Shamsiah Mohd Yunus said Thursday that monetary policy remains appropriate and accommodative after the bank cut its policy rate by 125 basis points last year to fight the recession. Still, she added, the central bank has room to provide further support to the economy if needed.
Malaysian stocks fluctuated after the data, with the benchmark index gaining 0.2% at the close at 12:30 p.m. The market was only open for a half-day Thursday ahead of the Lunar New Year holiday. The ringgit was unchanged at 4.0445 against the dollar.
The worst may be over, at least for now as Malaysia allowed the retail sector to resume operations Wednesday, following a month-long lockdown that’s estimated to have cost the economy 700 million ringgit ($173 million) a day.
The government said it would gradually reopen the economy even as the country remains under a state of emergency, seeking a balance that will protect lives while ensuring that economic activity continues. (Int’l News Desk)
