As of October 23, 2024, Malaysia's economic outlook remains cautiously optimistic, with Kenanga Investment Bank Bhd maintaining its GDP growth forecast at 5.0% for 2024. However, the bank anticipates a moderation to 4.8% in 2025, reflecting concerns over potential external vulnerabilities such as a slowdown in advanced economies and ongoing geopolitical tensions in the Middle East and Eastern Europe [6cfdee46].
In the third quarter of 2024, Malaysia's economy grew by 5.3%, a slight decrease from the 5.9% growth recorded in the previous quarter, indicating a potential cooling in economic momentum [6cfdee46]. This trend is further supported by a decline in exports, which fell by 0.3% in September 2024, a stark contrast to the 12.0% rise seen in August. Exports to the United States also slowed significantly, dropping from a robust 45.4% growth in August to just 9.1% in September [6cfdee46].
Despite these challenges, domestic demand in Malaysia remains strong, buoyed by a stable labor market and increasing tourist arrivals. The Malaysian ringgit has appreciated by 9.0% year-on-year, reflecting some resilience in the local economy [6cfdee46].
Additionally, UBS Global Research highlights that Malaysia's foreign direct investment (FDI) outlook for the second half of 2024 is positive, driven by interest from major economies such as the United States, Europe, China, Japan, and South Korea. The FDI is particularly concentrated in the electrical and electronics sector, with growing interest in chemicals, green technology, machinery, and metal fabrication [810a98ed].
The World Bank has also upgraded Malaysia's economic growth forecast for 2024 to 4.9%, citing improvements in the global economy and domestic political stability [fd6ef32e]. The country is positioned to chair ASEAN in 2025, which could enhance intra-regional trade opportunities [810a98ed]. However, the potential impacts of the U.S. presidential election and the pace of China's economic recovery remain critical factors to watch [1c945b0b].
In summary, while Malaysia's economic indicators show signs of growth and resilience, external factors and recent declines in export performance pose challenges that could affect the overall economic landscape in the near future.