Petaling Jaya: Alliance Bank Malaysia BHD said Malaysia’s economy is set for growth in 2025 as domestic demand is likely to strengthen further with continued consumer spending and ongoing growth in investment activities.
“Its strong fundamentals and diversified economic structure, coupled with renewed government focus on fostering new economic growth, will help boost Malaysia’s growth trajectory,” it said.
The Bank expects Malaysia to achieve gross domestic product (GDP) growth in 2025 that aligns with the government’s projection. Malaysia’s economy surpasses expectations in 2024. With GDP growth for the first nine months at 5.2%, the government’s revised projection is on track to achieve 4.8%-5.3% (from 4%-5% already), while the 2025 growth projection is revised to 4.5%-5.5%. Was directed at, indicating. Continuous growth trajectory.
Malaysia’s economic growth momentum is continued by the strong employment market which is growing from strength to strength.
“We are encouraged by the country’s improving unemployment rate to 3.2% and rising labor force participation rate to 70.5% in October 2024. This should bode well for Malaysia, given that domestic demand forms the bulk of our economy,” Alliance Bank Group said. CEO Kelly Kam Chee Khiong.
Meanwhile, he said, private investment is expected to benefit from the improved external environment, while the government continues with its expansionary fiscal policy to drive economic growth. Capital expenditure in the third quarter to 2024 increased to a multi-year high of 15.3%, reflecting the positive impact arising from investments approved in 2021-2023 and various government-led strategic developments.
This underlines the strong prospects of an investment upcycle in Malaysia, which will continue to provide further tailwinds in 2025, Kam said, adding that key downside risks include a slower-than-expected recovery in external demand and increased geopolitical tensions. .
By assuming the ASEAN chairmanship for 2025, Kam said, Malaysia is well positioned to enhance its global position. ASEAN has consistently proven its resilience and appeal as a major destination for foreign direct investment (FDI). Shifting patterns and priorities in global FDI, he said, particularly the growing focus on digital and renewable energy, are evident in the region.
More importantly, ASEAN’s growing prominence as a major hub for global supply chains underlines its competitive advantage in positioning itself as a partner for multinational companies, Kam said.
“The Johor-Singapore Special Economic Zone (JS-SEZ) shows the potential for cross-border cooperation in the region. We expect more initiatives to be announced in 2025 to facilitate investment and trade as well as smooth transfer of people and goods into the JS-SEZ,” he said.
“We are confident that the country’s economy will continue its growth momentum, driven by the Madani Economy framework that reflects the goals of achieving a progressive, inclusive and dynamic economy. “With Malaysia’s encouraging economic performance and fiscal reforms, we believe the ASEAN Chairmanship and JS-SEZ come at an opportune time for Malaysia to drive its economic growth and raise the country’s profile,” Kam said.
