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Malaysia's economic growth returns to normal in 2023: MOF

Malaysia's economic growth returns to normal in 2023: MOF

The country's economy recorded a growth of 3.7% in 2023, down from 8.7% in 2022, and is projected to rise to around 4% this year.

Malaysia's Ministry of Finance has reported that the economic growth of the country returned to normal in 2023, and it is expected to rise this year. 

According to a press release on 16 February 2024 (Friday), shared by the Ministry of Investment, Trade and Industry on Facebook, Malaysia's economy returned to normal with a growth of 3.7% in 2023, following "strong growth" recorded in the previous year (2022: 8.7%). 

Further, the overall growth in 2023 is expected to be lower than the 2024 budget projection of around 4%. 

This growth resulted in an improvement in External Trade with an offset of 3.2% despite the challenging external environment faced by Malaysia, causing the fall in exports due to the weak global demand. 

The growth in Q4 2023 was supported by an increase in economic fundamentals, among others: 

  • The labour market recorded a positive growth momentum with the unemployment rate in Malaysia reducing from 3.4% in Q3 2023, to 3.3% in Q4 2023. 
  • The rate of inflation moderated to 1.6% in Q4 2023, as compared to 2% in the previous quarter.

As further shared, the inflation rate eased to 1.5% in 2023, which was also recorded to be lower than other developed and regional economies such as Indonesia (2.6%), Eurozone (2.9%), Republic of Korea (3.2%), United States (3.4%) and Philippines (3.9%).

What to expect in 2024: 

Looking ahead, Malaysia's new economic growth strategy, through the MADANI economic framework, will accelerate its implementation of economic reforms in 2024. 

Prime Minister YAB Dato' Seri Anwar Ibrahim shared in a statement: "MADANI is confident that it will be able to achieve a stronger growth between 4% up to 5% in 2024, with the support of strong fundamentals and outlined reforms in the MADANI Economy and the second MADANI Budget." 

"The government is determined to further reduce the fiscal deficit to 4.3% this year, in line with commitments in the Public Finance and Fiscal Responsibility Act 2023.

"The government has managed to reduce the fiscal deficit to 5% in 2023 from 5.6% in 2022," he added.

It was also noted:

  • Malaysia's Budget 2024 will emphasise the government's commitment to fiscal management and retargeting of subsidies. 
  • Savings from these measures will be used to aid the poor and needy, and improve infrastructure and public services. 
  • Meanwhile, the strategies and initiatives under the Energy Transition Roadmap Plan, New industrial Master Plan 2030, and Mid-Term Review of the second Malaysia Plan will drive quality investments in high value-added sectors, in high-tech industries, energy and digital transitions and subsequently create
    more high-income job opportunities for citizens.

READ MORE: MITI Malaysia reinforces NIMP 2030's focus on public-private sector collaboration

Lead image / 123RF

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