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 jump from 3.7 percent growth 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.
Md. Mahmudul Alam, an associate professor of finance at Universiti Utara Malaysia, said the economy had benefitted from political stability under Malaysian Prime Minister Anwar Ibrahim.
“Over the past five years, frequent leadership changes – three prime ministers in three years before Anwar Ibrahim took office in 2022 – created uncertainty, weakening investor and public confidence,” Alam told Al Jazeera.
“Anwar’s longer tenure has provided greater stability, allowing for sustained policy implementation, boosting business sentiment, and contributing to stronger economic performance.”
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.
Yeah Kim Leng, an economics professor at Sunway University, said the Malaysian economy’s performance in 2024, including an expansion in investment, augurs well for this year amid global uncertainties such as United States President Donald Trump’s tariffs.
“The strengthening economy also enhances the government’s capability as well as credibility in steering the economy towards meeting the people’s aspirations,” Yeah told Al Jazeera.
Still, Bank Negara Malaysia cautioned that the positive economic outlook faced risks, including slowing growth in Malaysia’s trading partners.
“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.
