KUALA LUMPUR — The Malaysian economy grew by 5.1% in 2024, up from 3.6% in 2023, aligning with the government’s target of 4.8% to 5.3% year-on-year.
Bank Negara Malaysia (BNM) said the growth is mainly due to continued expansion in domestic demand and a rebound in exports.
On the domestic front, growth was mainly driven by stronger household spending reflecting favourable labour market conditions, policy measures to support households and healthy household balance sheets, the central bank said in a statement.
On the external front, exports recovered amid steady global growth, a continued tech upcycle, and higher tourist arrivals and spending.
These supported the current account, leading to a continued surplus of 1.7% of gross domestic product (GDP) in 2024 (1.5% in 2023).
For the fourth quarter of 2024 (4Q 2024), GDP expanded by 5.0% (3Q 2024: 5.4%), driven mainly by domestic demand.
The central bank said the strong investment activity was underpinned by the continued realisation of new and existing projects.
“Household spending was sustained amid positive labour market conditions and continued policy support.
“In the external sector, exports of goods and services continued to expand while capital and intermediate imports growth moderated,” it said.
On the supply side, BNM said growth was driven by expansion in the services sector, with increased support from both consumer-related and business-related subsectors.
The manufacturing sector was supported by the electrical and electronics (E&E) and primary-related clusters, while the construction sector continued to record double-digit growth with robust activities in the residential, non-residential and special trade subsectors.
However, growth was weighed down by contraction in the commodities sector following lower oil palm output and the continued decline in oil production.
On a seasonally adjusted, quarter-on-quarter basis, growth declined by 1.1% (3Q 2024: +1.9%).
Meanwhile, headline and core inflation for 2024 both declined to 1.8% in 2024, compared with 2.5% and 3.0%, respectively, in 2023.
BNM said headline inflation edged lower to 1.8% in the fourth quarter (4Q) of 2024 (3Q 2024: 1.9%).
“Lower inflation was observed for mobile communication services and RON97 petrol which was partially offset by higher inflation in food-related items, particularly fresh vegetables, fish and seafood,” it said.
Core inflation was lower at 1.7% (3Q 2024: 1.9%, driven largely by the moderation in inflation for mobile communication services which declined by 10% (3Q 2024: 0%).
Inflation pervasiveness remained moderate.
The share of Consumer Price Index (CPI) items recording monthly price increases remained below the long-term average of 39.8% (3Q 2024: 38.9 %; 4Q 2011-2019: 41.7%).
Going forward, inflation is expected to remain manageable in 2025 amid easing global cost conditions and the absence of excessive domestic demand pressures. – February 14, 2025