Malaysia Economic Growth Rate Climbs Between 4.5 to 5.5 Per Cent in 2024
Malaysia’s economic growth rate is predicted to improve further heading into next year, with the country’s gross domestic product (GDP) set to increase by 4.5 to 5.5 per cent in 2024, up from an estimated 4 per cent this year. IMF and ASEAN provided the outlook.
The credit rating agency stated in a statement accompanying its Economic Outlook 2024 report, released Tuesday, that a potential rebound in external demand is projected to assist the economy.
The report further states that among the factors that would propel growth momentum is the resilient domestic demand, supported by benign inflation and interest rates.
Additionally, the ratings agency predicted the country’s fiscal deficit to be 4.2 per cent of GDP in 2024, reflecting the government’s budgetary austerity efforts.
The rating agency stated that the smaller deficit – down from a projected 5 per cent this year – would be primarily driven by a lower subsidy bill, better management of other operating expenses, and increased tax revenue receipts from an improvement in economic conditions next year.
Nevertheless, the Malaysian government still needs to fund critical development projects. Thus, its debt will remain precarious at RM1.3 trillion in 2024 or 62.7 per cent of GDP, and it will have a significant debt servicing at 16.1 per cent of 2024 total projected revenue.
It further states that Malaysia’s risk progress is pivoted on the global economy’s success in achieving a soft landing and refraining from escalating geopolitical conflicts.
A spike in global food and commodity prices is the most common hindrance that could pressure domestic demand. A similar context could happen if Malaysia unsatisfactorily executes the retargeting of the RON95 petrol subsidy through an unintended price-ripple effect.
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