26-12-2023 (KUALA LUMPUR) Malaysia’s Gross Domestic Product (GDP) is poised to expand by 4-5% in the coming year, contingent on the assurance of macroeconomic stability, as projected by Shan Saeed, the Global Chief Economist at Juwai IQI.
Highlighting Malaysia’s robust economic standing, Saeed attributes the positive outlook to the nation’s solid macroeconomic foundations. Despite facing potential headwinds from global challenges such as geopolitical tensions and increasing interest rates in developed countries, Malaysia’s economy is in a growth phase.
Addressing the local currency, the ringgit (RM), Saeed anticipates fluctuations in the exchange rate, projecting it to hover between 4.17-4.44 RM per USD. Several factors will influence these changes.
Firstly, the anticipated weakening of the US dollar in 2024, as the US Federal Reserve plans to lower interest rates to stimulate economic growth, is expected to cause the ringgit to appreciate.
Secondly, higher oil prices, given that oil is a significant export for Malaysia, are set to boost the currency. Thirdly, a thriving tourism industry is forecasted to support the economy, with an influx of tourists contributing to increased local business and consumption.
Lastly, Foreign Direct Investment (FDI) is anticipated to flow into Malaysia from various sources, including China, Singapore, Europe, and the US. Saeed underscores the importance of FDI for macroeconomic development, representing the Malaysian Government’s commitment to policy stability and growth potential.
Saeed acknowledges the Malaysian Government’s efforts, led by Prime Minister Anwar Ibrahim, in sustaining economic momentum, emphasizing its critical role in shaping the macroeconomic outlook. The expert underscores that consumption and investment remain pivotal drivers of economic growth. Notably, sectors such as manufacturing, construction, real estate, technology, and energy are attracting active investment, both domestically and internationally, contributing to Malaysia’s economic vibrancy.
