Malaysia’s economy to remain healthy in 2024

LUMPUR: Malaysia’s economy is expected to grow between 4.0 per cent and 5.0 per cent in 2024, boosted by domestic spending and foreign direct investment (FDI), according to Interpacific Asset Management.

Its chief economist and fund manager Datuk Dr Nazri Khan said the relentless effort by the current government to bring in more foreign investment is also an indication that global investors have increased their confidence in Malaysia which bodes well for the domestic markets.

He said the government remains committed to its economic reform efforts to attract high-value investments through catalytic blueprints and initiatives under the MADANI economic framework, the National Energy Transition Roadmap (NETR) and the New

Industrial Master Plan 2030 (NIMP).

“Among the sectors that will benefit from these strategies is the construction sector where the government has allocated RM72.3 billion for transportation, water and energy.

“Meanwhile, the technology sector in Malaysia is also expected to expand further with the National Digital Economy Programme (NDEP) and Malaysia’s 5G deployment,” he told Bernama.

On inflation, Nazri anticipates a slight rise in the cost of goods and products due to the subsidy rationalisation which could have some impact on inflation.

“However, we are not expecting the inflation rate to move towards the August 2022 peak of around 4.5 per cent to 4.7 per cent.

“With the inflation rate in Malaysia stable at 2.0 per cent after coming through August 2022, we do not expect any changes to the overnight policy rate (OPR) for 2024,” he said.

With a lower inflation rate position currently, Nazri said Bank Negara Malaysia (BNM) is expected to remain neutral in its monetary stance for 2024.

He said the central bank would not remain static in its decision should the landscape change and he believes a wait-and-see strategy would be implemented before any decisions could be reached specifically on the OPR.

“We are favouring the OPR to be maintained throughout 2024 as the central bank has kept a neutral stance on its policy in the last few monetary meetings.

“This is an indication that BNM may be well positioned to let the OPR remain at 3.0 per cent,” he said. — Bernama