Malaysia on track to achieve higher GDP growth in 2024

Published on 29 May 2024.

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RAM Ratings maintains its projection for Malaysia’s GDP growth in 2024 at 4.5%-5.5% (2023: 3.6%). Economic momentum has shown signs of strength over the past few months with the latest 1Q 2024 GDP print for Malaysia indicating that the economy expanded by 4.2%. This marks a significant acceleration from the preceding quarter’s 2.9% and outperformed both market expectations (consensus: 3.9%) and the official advance estimate (3.9%) released last month. The stronger than expected momentum is driven by resilient domestic demand and a rebound in exports. Private consumption growth accelerated to 4.7% in 1Q 2024 (4Q 2023: 4.2%), reflecting the healthy labour market conditions, while export growth rebounded to 5.2% (4Q 2023: -7.9%) amid a global trade recovery and semiconductor upcycle.

The stronger momentum observed from the 1Q 2024 GDP performance provides a good sign that the economic upturn that we had anticipated to commence this year is on track. Domestic demand will remain a significant driver of Malaysia's GDP growth in 2024, buoyed by a robust job market and supportive financial conditions. The manufacturing sector and export performance, which took a beating last year, are expected to contribute positively to Malaysia's GDP growth as global trade picks up this year. The emerging semiconductor upcycle, evident in a strong pickup in global semiconductor sales growth to 15.2% in 1Q 2024 compared to the sharp 8.2% contraction in 2023, further enhances Malaysia’s export prospects.

All said, we remain cautious of looming headwinds. We anticipate headline inflation to average higher at 2.5%-3.0% in 2024 (2023: 2.5%), largely due to the incoming petrol subsidy rationalisation and the hike in service tax rate. However, inflation spike from acute ripple effects on prices and demand-pull inflation could significantly dampen domestic consumption momentum. Globally, the escalation of geopolitical conflicts and their impact on the global commodity market, along with spillover from the current financial market volatility amid uncertainties regarding the timing of US rate cuts, are also key downside risks.


Summary of RAM’s key projections

Sources: Department of Statistics Malaysia, Bank Negara Malaysia, Bond Pricing Agency Malaysia, Ministry of Finance Malaysia, RAM
Note: 2024f figures are RAM projections


Read the full Quarterly Economic Update report here.


Analytical contact
Tan Wan Ying
(603) 3385 2540

Woon Khai Jhek, CFA
(603) 3385 2512

Media contact
Sakinah Arifin
(603) 3385 2500


About RAM Rating Services Berhad (RAM Ratings)

Established in 1990, RAM Ratings is a leading credit rating agency registered under the Securities Commission’s Guidelines on Credit Rating Agencies. In addition to the provision of credit ratings for corporate bonds and sukuk and their issuers, RAM Ratings also provides research and publications on Islamic finance, fixed income and macro-economic and industry analysis as well as data analytics relating to credit risk, counterparty assessments and other related domains. 


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Publication Date Published Category
Quarterly Economic Update 2Q2024 29-May-2024 Economic Outlooks View PDF