KUALA LUMPUR – Malaysia’s economy expanded faster than expected in the third quarter of 2024 on gains in the services and manufacturing sectors, putting the nation on track to meet the government’s revised annual growth forecast.
Gross domestic product (GDP) grew 5.3 per cent in the July-September period from a year ago, according to advanced estimates from Malaysia’s Department of Statistics on Oct 21. That is higher than the 5.1 per cent median prediction in a Bloomberg survey.
The growth print comes just days after Prime Minister Anwar Ibrahim raised Malaysia’s 2024 growth forecast range to 4.8 per cent to 5.3 per cent amid expectations of a stronger recovery. This is set to help the government meet its fiscal deficit target of 4.3 per cent of GDP despite pushing a plan to cut petrol subsidies from 2025.
Malaysia’s government expects the economy to grow by about 4.5 per cent to 5.5 per cent in 2025, largely exceeding the 4.6 per cent expansion predicted by analysts surveyed by Bloomberg. Higher salaries for civil servants and plans to increase the minimum wage in the private sector are poised to boost domestic demand in 2025.
Still, the trade-reliant nation remains vulnerable to global volatility. China’s uneven recovery has weighed on Malaysia’s exports, which contracted in September amid a decline in outbound shipments to the world’s second biggest economy.