GDP to grow 4.7% in 2023; 4.9% in 2024: Juwai IQI

PETALING JAYA: Malaysia’s outlook is surprisingly bright, despite global economic growth slowdown, and its economic growth is expected to surpass some Asean, European and North American countries, both this year and 2024 , according to Irhamy Valuers International CEO and founder Irhamy Ahmad (pix).

“We expect (gross domestic product) GDP growth to come in at 4.7% in Malaysia this year and our forecast for 2024 is 4.9%.

“One way we see this growth is through a 30% increase in valuation jobs for large construction machinery and factory equipment. Companies are replacing their machinery to increase productivity and accommodate demand growth, that is an excellent sign for the economy,” he said in a statement today.

In developed countries, he said that higher interest rates, soft demand, and high inflation are weakening the outlook. He added that the International Monetary Fund predicts world economic growth will likely be 3% both this year and next.

“Developed countries are faring worse. GDP growth will only be 0.9% this year in the Euro area and 1.8% in the United States,” he remarked.

Irhamy said that the three sectors that are driving the positive outlook are the transition to net zero, trade, and the digital economy.

“Malaysia’s growing economy needs ever-more power, so the transition to net zero requires not just replacing current power generation with greener alternatives but also building entirely new capacity that is green right from the beginning. That means hundreds of millions of ringgits of investment.

“Indonesia and Vietnam have set examples for Malaysia by signing Just Energy Transition Partnerships with developed nations. The partnerships will open the door to tens of billions of dollars of green investment,” he said, adding that decarbonisation will create significant new opportunities.

He cited Bank Negara Malaysia, which estimates that the energy sector alone will need RM1.85 trillion of investment by 2050.

In addition, Irhamy pointed out that last month, the government announced that it had enticed Tesla to set up its headquarters in Selangor, which further proves that Malaysia can succeed in its green ambitions.

Irhamy said that trade is the second factor driving economic growth in Malaysia, partly due to the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

“The global centre of gravity for manufacturing is shifting from China to Southeast Asia, and the region now does more trade with China than does the European Union. Within Southeast Asia, Malaysia is increasingly developing as a manufacturing base.

“This year, Malaysia signed memoranda of understanding with Indonesia and Brunei that may lead to billions of ringgits of further manufacturing investment. And while industrial output growth fell below 3% in April, it remains higher than in larger manufacturing economies like Vietnam, Thailand, and Korea,” he said.

Furthermore, he said that the last factor behind the country’s strong GDP is the rapidly growing digital economy, which will account for one of every four ringgits generated by 2025.

“Malaysia’s farsighted investment in 5G is one enabler here, with two-thirds of populated areas already covered by 5G as of July 31,” said Irhamy.

In addition, he said that data centers are a fast growing element of the digital economy, with 33 data centres in Malaysia and at least a dozen more are being developed, driven by a supportive government policy, high levels of connectivity, a large population, abundant cost-competitive land, inexpensive sustainable energy and Malaysia’s geographical position in Asean.

He noted that the digital economy also releases productivity gains in other sectors.

“Digitisation will both increase growth and reduce costs in these sectors. That will add still more to overall GDP growth.

“Malaysia is in a strong economic economically and looks set to reap benefits over the next two years from digitisation, trade growth and the transition to net zero, all of which will lead to billions of ringgit of new investment,” said Irhamy.

Irhamy Valuers International is a part of Juwai IQI.

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