The small and medium enterprise (SME) sentiment index rose to 55.8 in the second half of 2024 (2H24), which is an increase from 54.7 in the first half (1H24).
In a statement, SME Bank Malaysia Bhd said this marks the third consecutive increase in the index and the highest score since its inception, reflecting growing confidence in micro SME (MSMEs).
SME Bank acting group president/chief executive officer Datuk Dr Mohammad Hardee Ibrahim attributed the upward trend to improving economic growth, robust sales expectations and renewed expansion and job creation plans.
“This reaffirms MSMEs’ critical role in Malaysia’s economic trajectory, further strengthened by the Madani government’s focus on fostering sustainable and inclusive growth, particularly in creating a positive outlook for MSMEs to continue thriving in an ever-changing and competitive business environment,” he said.
Hardee added that as one of Malaysia’s leading development financial institutions mandated to empower the MSME value chain, SME Bank will continue to provide value beyond financing.
“The resounding positive momentum recorded in the recent survey reinforces the importance of MSMEs, which significantly contribute to Malaysia’s overall growth trajectory,” he noted.
At the same time, SME Bank chief economist Lynette Lee Li Qing said Malaysia’s economy grew by 5.2% in the first nine months of 2024, with sentiment aligned to a better national gross domestic product (GDP) growth forecast for 2025. SME Bank expects the economy to grow between 4.5% and 5.5%.
“Other forward-looking indicators such as the Department of Statistics Malaysia’s (DOSM) Business Tendency Survey also predicts favourable business conditions in the coming months.
“While optimism is rising, MSMEs still face challenges, including higher cost pressures and increased vulnerability to exchange rate fluctuations due to rising import and export activities. These factors could impact profit margins if not managed effectively,” she added.
