THE country’s growth will be driven mainly by resilient domestic expenditure, with additional support emanating from the expected recovery in exports.
According to the Economic and Monetary Review 2023 report, sustained employment and wage increases will continue to bolster household spending. Tourist arrivals and expenditures are anticipated to see further improvement.
It noted that investment activity will be fueled by the continued progress of multi-year projects in both the private and public sectors, with some support from the implementation of catalytic initiatives under the national master plans.
Nevertheless, domestic growth remains subject to downside risks from both external and domestic factors. External factors include a weaker-than-expected global growth and further escalation of geopolitical conflict.
Domestically, significant disruptions to commodity production and the enforcement of subsidy rationalisation measures could also dampen the growth prospects.
Meanwhile, trade activity is expected to recover gradually in tandem with a rebound in global trade. Gross exports are expected to expand (2024f: 5%; 2023: -8%), driven by the recovery in global trade and the technology upcycle, supporting E&E and non-E&E exports, as well as higher commodity prices underpinning commodity exports.
Gross imports, which contracted in 2023, are also projected to increase.
In 2023, the Malaysian economy grew by 3.7% despite facing challenges stemming from weak external demand, disruptions in commodity production and higher cost of living.
