Malaysia Forecasts 4-5% Economic Growth in 2024, Driven by FDI

Malaysia’s economy is poised to grow between 4.0% and 5.0% in 2024, fueled by robust domestic spending and increased foreign direct investment (FDI), reports Interpacific Asset Management. Datuk Dr. Nazri Khan, the chief economist and fund manager, highlights the government’s persistent efforts to attract foreign investment as a sign of growing investor confidence in Malaysia, which bodes well for domestic markets.

The government’s commitment to economic reform initiatives, including catalytic blueprints and programmes under the Madani economic framework, the National Energy Transition Roadmap, and the New Industrial Master Plan 2030, is expected to attract high-value investments across various sectors. Specifically, the construction sector is set to benefit from substantial government allocations for transport, water, and energy projects amounting to RM 72.3 billion.

Furthermore, Malaysia’s technology sector is poised for expansion with initiatives such as the National Digital Economy Programme and the deployment of 5G infrastructure.

Regarding inflation, Nazri predicts a moderate increase in the cost of goods and products due to subsidy rationalisation measures. However, he expects the inflation rate to remain stable at around 2.0% in 2024, ruling out significant changes to the Overnight Policy Rate (OPR).

With the current lower inflation rate, Bank Negara Malaysia (BNM) is likely to maintain a neutral monetary stance throughout 2024. However, Nazri emphasises that BNM may adjust its policies in response to changing economic conditions, adopting a wait-and-see approach before making decisions regarding the OPR.

Overall, the forecasted economic growth, coupled with stable inflation and monetary policies, sets a positive outlook for Malaysia’s economic prospects in 2024, positioning the country as an attractive destination for investors seeking growth opportunities.