Strong domestic demand set to boost Malaysian economy
Malaysia’s economic growth will be driven by resilient domestic expenditure, aided by an expected recovery in exports, according to the central bank’s latest Economic and Monetary Review 2023 report.
Bank Negara Malaysia’s report the country’s economy is expected to grow 4%–5% in 2024, with a solid employment market and wage increases continuing to bolster household spending.
And the tourism sector is expected to improve further, while the implementation of new and ongoing multi-year projects by both the private and public sectors would support investment activity.
Nevertheless, domestic growth remains subject to risks from both external and domestic factors, the bank’s report said. It cited external factors including weak global growth and further escalation of geopolitical conflict.
However, the report said trade activity is expected to recover gradually with the rebound in global trade; gross exports are expected to expand by 5% this year.
Gross imports, which contracted in 2023, are also projected to increase.
In 2023, the Malaysian economy grew by 3.7% despite facing challenges stemming from weak external demand, disruptions in commodity production and higher cost of living.
Trade mission secures investment boost
Malaysia has secured potential investments worth RM46 billion (£7.6 billion) and potential Malaysian exports valued at RM2.4 billion from a recent trade and investment mission to Germany and France.
Investment, Trade and Industry Minister Zafrul Abdul Aziz, who led the delegation, said corporations – including Airbus Group, BMW, Braun, Deutsche Bahn and Michelin – shared their investment plans and interest in establishing strategic partnerships in Malaysia, which will contribute significantly to Malaysia’s economic landscape particularly in terms of technology transfer and creation of high-value jobs in the country.
Zafrul said: “These business interactions with German and French companies are part of our strategic engagement to update them on the implementation of the New Industrial Master Plan 2030 (NIMP 2030), our commitment to the speedy execution of projects as well as our business-friendly stance on expanding investments and trade.
“Our door is always open on hosting companies from Germany and France, two of Europe’s main drivers of economic growth and industrial powerhouse, which will pave a significant pathway towards reindustrialising our nation and revitalising our economy.”
He said these engagements were also aimed at enhancing Malaysia’s involvement in the global value chain, thus facilitating further integration into international markets.
“By fostering collaborative relationships with key players in France and Germany, Malaysia seeks to expand its footprint in global trade and solidify its position as a reliable and competitive partner in various industries,” he said.
During the mission to France, a meeting took place between Zafrul and his French counterpart Franck Riester, the Minister Delegate for Foreign Trade, Economic Attractiveness, Francophonie, and French Nationals Abroad.
“Both sides were engaged in a fruitful exchange of views and updates, aimed at further fortifying bilateral economic collaborations,” Malaysia’s Investment, Trade and Industry Ministry (MITI) said in a statement.
In a statement MITI said: “Of particular focus were areas of mutual interest, including advancing energy transition initiatives, fostering the adoption of green economy practices, and exploring the potential to recommence negotiations for a free trade agreement with the EU. Such discussions underscored the shared commitment to enhancing economic cooperation and leveraging opportunities for sustainable growth between Malaysia and France.”
The mission covered the cities of Berlin and Hamburg in Germany, as well as Paris, France. The German leg of the mission was in conjunction with Prime Minister Anwar Ibrahim’s official visit to Germany.
The mission’s delegation comprised of officials from MITI, the Malaysian Investment Development Authority and Malaysia External Trade Development Corporation.
Officials were engaged in high-level meetings with European companies in target sectors under the NIMP 2030, including the automotive, aerospace, railway, chemical and medical sectors, as well as machinery and equipment.
In 2023, Malaysia-German bilateral trade increased by 5.9%, reaching RM63.46 billion, positioning Germany as Malaysia’s 13th largest trading partner and the largest trading partner within the EU.
Malaysia-France bilateral trade was worth RM16.71 billion) positioning France as Malaysia’s 22nd–largest trading partner and the third-largest trading partner within the EU.
