Various positive indicators have boosted confidence in Malaysia’s growth outlook, including the recovery of the ringgit, inflation remaining manageable and even the low rate of employment.
In a social media post, Finance Minister II Amir Hamzah Azizan highlighted the country’s solid trajectory with the 2024 gross domestic product (GDP) forecast to exceed 5% as well as the declining fiscal deficit, which is projected to be 4.3% of GDP this year.
“Total approved investment increased 10.7% to RM254.7 billion for January-September 2024 against the corresponding period in 2023,” he said in the post.
Additionally, in conjunction with the one-year mark of his appointment as Finance Minister II, Amir Hamzah said that implementing initiatives in line with the MADANI Economy framework is a main focus for him in this current role, which includes restructuring the economy by expanding the national revenue safeguarding the people’s well-being in a fair and inclusive manner and supporting more robust governance.
“For me, governance is the line separating falsehood and success. It’s clear and concrete, but balancing between fiscal expansion and the people’s welfare takes all of the experience and knowledge I gained in the corporate sector over the previous 27 years,” he explained, saying that the Budget 2025 is steering the MADANI Economy framework which bears a humanitarian agenda.
“More comprehensive and focused aid programmes are being provided to ensure that no one is left behind amid the national development progress.
“Various proactive measures have been taken to enhance the nation’s competitiveness at the international level while ensuring domestic financial stability,” he added.
Meanwhile, the International Monetary Fund (IMF) had also commended Malaysia’s economic reforms, specifically the introduction of the Public Finance and Fiscal Responsibility Act (FRA) 2023 and the successful implementation of the electricity and diesel subsidy reforms.
The global organisation also emphasised the need to accelerate these reforms to create a more inclusive and resilient economy in the face of global uncertainties.
“Malaysia’s strong economic performance provides the country with a window of opportunity to advance its ambitious reform agenda. The government’s structural reform plans under the MADANI Economy Framework are appropriately focused,” it said.
The FRA marked a significant milestone for fiscal management and governance, pointing out that in the face of an increasingly uncertain global environment, there is a need to rebuild fiscal buffers, augment growth potential and strengthen social protection while preserving macroeconomic and financial stability.
As for economic growth, IMF projected Malaysia’s growth to moderate from 5% in 2024 to 4.7% in 2025, reflecting a moderation in investment growth and the rising global uncertainty.
“Risks to growth are titled to the downside, mainly due to the uncertain global outlook, including external risks from deeper geoeconomic fragmentation.
“Meanwhile, upside risks could arise from the faster-than envisaged implementation of large investment projects in Malaysia,” it added.
IMF also noted that the current neutral monetary policy stance is appropriate and Malaysia’s financial sector remains sound with robust banks’ capital and liquidity positions.
