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MALAYSIA'S economy achieved a growth rate of 5.1% in 2024, surpassing the 3.6% recorded in 2023 and aligning closely with the government's projected range of 4.8% to 5.3% year-on-year growth.
Bank Negara Malaysia (BNM), in a statement today, said the country’s robust economic performance was primarily driven by sustained domestic demand and a strong recovery in exports.
On the domestic front, growth was fuelled by a significant uptick in household spending, which was bolstered by favourable labour market conditions, government support measures for households, and healthy household finances.
Additionally, a surge in investment approvals and the ongoing progress of long-term projects, both from the private and public sectors, contributed positively to investment growth.
Noteworthy projects linked to national strategic plans, such as the New Industrial Master Plan, the National Energy Transition Roadmap, and the National Semiconductor Strategy, played a critical role in this investment push.
Externally, Malaysia's export sector rebounded, benefiting from steady global economic growth, a booming tech sector, and increased tourism activity, with both arrivals and tourist spending on the rise.
This helped maintain a surplus in Malaysia's current account, which rose to 1.7% of GDP in 2024, up from 1.5% the previous year.
For the fourth quarter (4Q) of 2024, the economy grew by 5.0%, slightly down from 5.4% in the third quarter (3Q) of the same year.
This growth was driven primarily by robust domestic demand, with household spending remaining resilient amid positive labour market trends and continued policy support.
In terms of sectoral growth, the services sector saw the most significant expansion, supported by both consumer-facing and business-related subsectors.
The manufacturing sector also posted solid growth, particularly in the electrical and electronics (E&E) industries and primary goods production. The construction sector continued to thrive, recording double-digit growth, especially in the residential, non-residential, and specialized trade segments.
However, growth was somewhat dampened by a contraction in the commodities sector, primarily due to lower output in oil palm and the ongoing decline in oil production.
On a quarterly basis, Malaysia's economy experienced a slight contraction of 1.1% in the fourth quarter, compared to a growth of 1.9% in the previous quarter.
Ringgit strengthens by 2.7% against US dollar in 2024
The Malaysian ringgit saw a notable appreciation of 2.7% against the US dollar in 2024, marking it as one of the few Asian currencies to strengthen against the greenback.
Bank Negara Malaysia (BNM) reported that the ringgit also strengthened against several other major currencies, including the Singapore dollar, Korean won, and Japanese yen. As a result, Malaysia's nominal effective exchange rate (NEER) appreciated by 7.5% throughout the year.
However, the ringgit faced some challenges in the fourth quarter of 2024, depreciating by 8.1% against the US dollar and 3.4% against other key trading partners' currencies.
This shift mirrored broader regional trends, as the US dollar strengthened due to market expectations of smaller US interest rate cuts in 2025 and heightened investor caution amid policy uncertainties under the new US administration. – February 14, 2025