Malaysia’s economy to grow 4.7% this year, 4.9% in 2024, says ADB

KUALA LUMPUR: has forecast Malaysia's economy to grow 4.7% this year, and 4.9% in 2024.

In its Asian Development Outlook April 2023 released on Tuesday (April 4), the ADB said Malaysia's growth exceeded expectations in 2022, buoyed by strong domestic consumption and a rebound in services, as borders reopened and economic activity normalised.

It said inflation remained broadly muted, dampened by government subsidies and price controls.

A less accommodative monetary stance was adopted in response to higher global interest rates.

“Growth is expected to moderate, and inflation to decelerate, in 2023 and 2024, mainly tracking changes in the global environment.

“Malaysia should promote gender-inclusive policies to boost women's participation in the labour market,” it said.

Economic performance

The ADB said Malaysia maintained a performance that was better than expected, growing by 7% year-on-year in the fourth quarter to round off 2022 with a growth of 8.7%, significantly higher than 3.1% in 2021.

It said the robust growth was driven mainly by strong domestic consumption, as markets normalised and labour market conditions improved.

Economic prospects

The bank said Malaysia's economic performance in 2023 will depend on the external environment.

It said such factors include spillovers from the reopening of , government policy support, and developments in the electronics industry.

The global economic slowdown, persistent inflation, and continuing rate hikes by the US Federal Reserve, meanwhile, diminish prospects for the year.

On the upside, the impact of such downside risks can be countered by stronger growth in China, a recovery in tourism, and continued government support to boost domestic consumption and tame inflation.

“In 2023, gross domestic product is expected to grow at a moderate pace of 4.7%, before accelerating to 4.9% in 2024,” said the ADB.


The ADB said the global slowdown may bring slightly lower inflation, but prices could surprise on the upside if commodity prices soar again.

It said the inflation rate will likely decelerate with the weakening of domestic and global demand, amid continuing efforts by the government to contain the rising cost of living and strengthen the ringgit, and with a recovery in the global supply chain.

The ADB said any increase in inflation would depend on changes to domestic policies on subsidies and price controls, and developments in global commodity prices.

Inflation is projected to be lower at 3.1% in 2023, and 2.8% in 2024.

Source : The Edge Markets

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