THE Malaysian economy is expected to strengthen in 2024, growing in the range of 4% to 5% amid expansion in all sectors and better prospects in global trade.
In its Economic Outlook 2024 report, the Finance Ministry said that world trade is likely to improve next year in tandem with stronger trade activities.
This in turn would benefit Malaysia, whose economy is heavily dependent on trade.
The Finance Ministry also said that efforts will be intensified to strengthen Malaysia’s agility in keeping pace with the fast-changing environment.
This would require a paradigm shift and innovation culture to enhance economic growth, it added.
“The continuation of strategic projects, digitalisation, improved productivity and advanced manufacturing will further stimulate the growth of the economy in the medium term.
“All economic sectors are expected to benefit from the recent policies such as the National Energy Transition Roadmap, the New Industrial Master Plan 2030 and the Medium-Term Review of the 12th Malaysia Plan, which are in tandem with the Ekonomi Madani framework,” the ministry said.
Breaking down by economic sectors, the Finance Ministry forecast the services sector to grow by 5.6% in 2024, driven by expansion in all subsectors.
In addition, vibrant tourism-related activities as well as continuous consumer spending are expected to further spur the growth of the sector.
In comparison, the services sector is projected to grow by 5.5%.
Meanwhile, the manufacturing sector is expected to expand by 4.2% next year, as compared to 1.4% in 2023.
The improved growth rate is driven by better performance in both export and domestic-oriented industries.
The export-oriented industries are expected to benefit from the recovery of external demand with the electrical and electronics segment projected to surge, primarily driven by memory products.
Similarly, domestic-oriented industries are anticipated to grow steadily, backed by higher output in transport and construction-related segments, in tandem with better consumer spending and business activities.
The agriculture sector is poised to grow by 1.2% in 2024, as compared to 0.6% this year, driven by expansion in most subsectors, particularly oil palm, other agriculture and livestock.
With minimal impact expected from the El Nino phenomenon and labour conditions returning to pre-pandemic level, the oil palm production is projected to increase.
“Furthermore, increased matured areas especially in Peninsular Malaysia and higher oil extraction rate arising from more frequent harvesting rounds are also expected to support the subsector’s growth,” stated the Finance Ministry.
It added that crude palm oil price is forecast to average between RM4,000 and RM4,500 per tonne in 2024, as compared to 2023’s average of RM3,500 to RM4,000 per tonne.
The construction sector is forecast to increase by 6.8% in 2024 as compared to 6.3% in 2023, driven by continuation of large scale projects and affordable housing.
As for the mining sector, a rebound of 2.7% in growth is expected after the sector is projected to contract by 0.8% this year.