Malaysia Central Bank Forecasts GDP Growth To Improve Moderately

(RTTNews) - Malaysia's economy is projected to log a slightly faster growth this year on household spending and investment, the Bank Negara Malaysia said in its Economic and Monetary Review on Wednesday.

The central bank forecast the economy to grow in the range of 4 percent to 5 percent this year after rising 3.7 percent in 2023.

Bank Negara Malaysia Governor Datuk Abdul Rasheed Ghaffour said growth will be driven by household spending, underpinned by higher income growth and continued expansion in employment.

Downside risks to economic growth include weaker-than-expected global growth, further escalation of geopolitical conflicts, and more severe shocks on commodity production due to extreme weather events, the governor said.

On robust income growth, household spending is expected to climb 5.7 percent. In 2024, the unemployment rate is projected to moderate to 3.3 percent.

Investment is forecast to advance 6.2 percent, supported by new and ongoing multi-year projects in both public and private sectors.

The central bank projected the current account surplus to improve to 1.8 percent to 2.8 percent of GDP this year. Higher goods surplus, lower services deficit following continued improvement in inbound tourism will lift the current account surplus, the banker noted.

Inflation is expected to average between 2 percent and 3.5 percent this year. "The wider forecast range accounts for some upside impact on inflation from the implementation of subsidy rationalization," the governor added.

Core inflation is seen between 2.0 percent and 3.0 percent in 2024, reflecting stable demand conditions and contained cost pressures.