KUALA LUMPUR: Malaysia’s economy is poised for steady growth this year, driven by strong domestic demand, robust investment activities and growth in exports and tourism despite potential global uncertainties, according to the Federation of Malaysian Manufacturers (FMM).
In a statement today, its president Tan Sri Soh Thian Lai noted that in the second quarter and third quarter of 2024, Malaysia’s gross domestic product (GDP) grew at 5.9% and 5.3%, respectively. He added that the nation’s GDP growth is forecast to be between 4.5% and 5% this year.
“However, risks remain, including slower recovery in China, potential shifts in the United States’ policy, global commodity price fluctuations and domestic inflation pressures,” he said.
Nonetheless, exports are anticipated to continue doing well this year, with key sectors like electrical and electronics, semiconductors, palm oil, machinery and chemicals driving this expansion.
On the same note, he said the impact of potential US tariffs on Malaysia’s exports is expected to be limited, based on historical data.
“However, inflation is forecast to rise to approximately 3% in 2025, influenced by domestic factors such as an increase in the minimum wage, changes in the Employees Provident Fund contributions for foreign workers, the extension of the Sales and Service Tax and subsidy rationalisation efforts.
“Nevertheless, inflation is expected to remain within the Ministry of Finance’s target range of 2-3.5%,” he said.
FMM also expects the ringgit to remain firm in 2025, supported by strong domestic demand and an improved tourism sector. “Factors such as the US Federal Reserve rate cuts, labour supply changes and inflation will influence the currency’s strength,” he said. – Bernama
