Published: October 13, 2023 at 4:00 am ET
By Ying Xian Wong
Malaysia’s Finance Ministry forecasts the country’s economic growth will be 4.0% to 5.0% in 2024, in line with its estimates for this year, driven by broad-based expansion and improving global trade prospects.
The Southeast Asian country said in its annual financial outlook report on Friday that growth is expected to be broad-based, led by…
By Ying Xian Wong
Malaysia’s Finance Ministry forecasts the country’s economic growth will be 4.0% to 5.0% in 2024, in line with its estimates for this year, driven by broad-based expansion and improving global trade prospects.
The Southeast Asian country said in its annual financial outlook report on Friday that growth is expected to be broad-based, led by the services sector. Economic activity for intermediate and final service groups is expected to continue to increase, supported by the likely recovery in domestic consumption and improved exports amid recovery in electronics and edible oil demand.
The Treasury forecasts economic growth will moderate to about 4.0% in 2023, compared with 8.7% growth last year, citing increasing external headwinds.
Malaysia’s growth reached 4.2% in the first half of the year, driven mainly by private spending.
The ministry said the economy could grow moderately in the second half of this year despite still low external demand and off a high base, with domestic demand continuing to be a growth driver.
The ministry expects consumer inflation to be between 2.5% and 3.0% this year, below the previously expected range of 2.8% and 3.8%, as global commodity prices weaken, Disruptions in the supply chain ease and government subsidies are provided for selected items.
Consumer prices are estimated to rise by 2.1% to 3.6% in 2024, partly due to the government’s gradual transition to a targeted subsidy mechanism.
The Finance Ministry also unveiled a 393.8 billion ringgit ($83.57 billion) budget for fiscal 2024. The aim is to reduce the budget deficit to 4.3% of gross domestic product next year, amid expected higher revenues and lower spending as well as continued fiscal consolidation efforts.
Malaysia’s target fiscal deficit for 2023 was 5.0% of GDP.
The ministry expects government revenue to rise to RM307.6 billion next year from RM303.2 billion in 2023, due to higher taxes under new measures including capital gains tax on the disposal of unlisted shares is.
The government’s operating expenditure is expected to rise to RM303.8 billion in 2024 from RM300.1 billion in 2023.
Write to Ying Xian Wong at [email protected]
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