Malaysian economy slows in last quarter of 2024, showing risks ahead
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Uncertainty over the impact of Donald Trump’s trade policies threatens to undermine Malaysia's economic growth.
PHOTO: BT FILE
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KUALA LUMPUR - Malaysia’s economy expanded at a slower clip in the fourth quarter at 2024, signalling a challenging road ahead as the trade-reliant nation contends with heightened global risks.
Gross domestic product rose 4.8 per cent in the October to December period from a year ago, according to advance estimates from Malaysia’s Department of Statistics on Jan 17. That is below the 5.2 per cent median estimate in a Bloomberg News survey and the 5.3 per cent expansion in July to September 2024, marking a second straight quarter of slower growth.
For the full year, the economy increased 5.1 per cent in 2024, putting it within the government’s projection of a 4.8 per cent to 5.3 per cent growth and faster than the 3.6 per cent pace in 2023.
“It is not the home run analysts were expecting but signals strong momentum nonetheless,” said economist Lavanya Venkateswaran at OCBC Bank. “We maintain our 2025 GDP growth forecast of 4.5 per cent and expect Bank Negara Malaysia to remain on hold in 2025.”
While officials remain optimistic about the country’s growth amid improving foreign investments, uncertainty over the impact of Donald Trump’s trade policies threatens to undermine the economic recovery seen taking place in Malaysia. Plans by the incoming US president to roll out tariffs, as well as China’s disappointing growth, may weigh on global demand.
Growth during the quarter was driven by the services sector. Advances in the manufacturing and construction industries slowed, while agriculture declined in the last three months of 2024.
In a separate Bloomberg News survey, economists expect Malaysia to expand 4.7 per cent in 2025, near the lower-end of the official projection of 4.5 per cent to 5.5 per cent. All analysts surveyed so far expect the central bank to keep the policy rate steady at 3 per cent at its first meeting in 2025 on Jan 22.
“Recent increases in tourist arrivals and civil servant pay are expected to further boost household spending and retail activity, contributing positively to overall economic momentum,” chief statistician of Malaysia Mohd Uzir Mahidin said in a statement. BLOOMBERG
