Improvements in export performance and a revitalised domestic demand powered up Malaysia’s economy in the first quarter of 2024 (Q1 2024) by 4.2% (Q4 2023: 2.9%). With the Q1 2024 growth exceeding Bloomberg consensus forecast of 3.9%, the Government is optimistic that Malaysia’s gross domestic product (GDP) is well placed to expand within the official forecast range of 4% to 5%.
Prime Minister and Finance Minister YAB Dato’ Seri Anwar Ibrahim said the domestic economy’s encouraging performance in Q1 2024 indicates that the Government’s policies and economic management are effective in promoting growth.
“In spite of the turbulent global economy, Malaysia’s economy has performed strongly. Within the first full year in office, the MADANI Government initiated a full set of policy reforms and remain committed to our reform agenda to transform the economy and public delivery,” he said.
“The Government is committed to see through the policy implementation set forth in the Ekonomi MADANI framework in the months and years ahead. The optimism springing in the domestic capital markets, exemplified by the FBM KLCI etching new highs, reflects global investors’ renewed interest in Malaysia’s reform narrative,” added YAB Dato’ Seri Anwar.
From the supply side, all sectors expanded and catalysed economic growth in Q1 2024. This was exemplified by favourable economic fundamentals in the quarter, among others:
- The labour market continued its positive momentum with total employment up by 2.1% to 16.4 million people. Over 50,000 new jobs were created, thus contributing to the low unemployment rate of 3.3%. The growth of salaries and wages in the services and manufacturing sectors also remained encouraging at 3.3% and 1.2%, respectively.
- Inflation remained benign at 1.7% compared to 1.6% in Q4 2023.
- Industrial Production Index (IPI) increased by 3.3% in Q1 2024 (Q4 2023: 0.8%) supported by positive momentum in all subsectors led by electricity (8.9%); mining (5.9%); and manufacturing (2.1%).
- Construction’s value of work done recorded a double-digit growth of 14.2% amounting to RM36.8 billion in Q1 2024 (Q4 2023: 6.8%; RM34.1 billion). This was attributed to the expansion in all subsectors, led by civil engineering (24.7%); specialised trade activities (11.8%); and residential buildings (11.5%).
- On the external front, Malaysia’s total trade grew by 7.1% to reach RM690.6 billion, supported by an increase of 2.2% in gross exports to RM362.4 billion and 13.1% in gross imports to RM328.2 billion. Malaysia continues to register a trade surplus, amounting to RM34.2 billion in Q1 2024.
- Current account of the Balance of Payments recorded a surplus of RM16.2 billion or 3.6% of GNI (Q4 2023: 0.2%; RM0.9 billion) supported by surplus in goods account as well as higher tourists arrival. Net foreign direct investment (FDI) stood at RM5.5 billion (Q4 2023: RM19.6 billion), particularly from Hong Kong, the US, Germany, Cayman Islands and Bermuda. This was channelled to the mining & quarrying sector; information and communication sector; as well as financial and insurance/takaful activities.
Economic transformation’s momentum to accelerate in 2024
The continued economic growth momentum signifies the country’s strong fundamentals and investors’ confidence on the economy, buoyed by sound MADANI Government’s policies. The Ekonomi MADANI framework, which mapped out fresh strategies for Malaysia’s economic growth and identified new growth industries, has started to bear positive results evidenced by the economy’s continuing expansion. This is further catalysed by economic measures outlined in Belanjawan 2024 and the Government’s commitment to introduce responsible fiscal management while ensuring the welfare of vulnerable communities are protected.
In addition, the implementation of strategies and measures under the National Energy Transition Roadmap, New Industrial Master Plan 2030 as well as the ongoing Twelfth Malaysia Plan initiatives will continue to attract quality investments in high value-added industries that in turn will create high-income jobs and enhance quality of living of the rakyat.
Moving forward, efforts are being made to further strengthen public service delivery as well as increase productivity. This is to ensure that pro-economic growth policies are executed as planned to achieve the nation’s aspiration.