Malaysia’s gross domestic product growth hits 5.1% in 2024

Malaysia’s GDP growth, which reached 5.1% in 2024, has provided direct benefits for the wider population including higher wages, higher quality job opportunities and better social assistance, as well as growth in business and trade, a government minister has said.

Head of the finance ministry Amir Hamzah Azizan told the lower house of Malaysia’s Parliament (Dewan Rakyat) that 2024 saw the creation of around 127,000 new job opportunities in the private sector, with an unemployment rate of 3.2%.

“All countries have adopted GDP growth as a national economic performance indicator. GDP growth reflects an economic expansion, higher revenue and more job opportunities that offer better salaries,” he told parliamentarians.

The minister noted that the country managed to achieve real GDP growth of 5.1% for 2024, with the second-quarter GDP growth being the highest at 5.9%. Nominal GDP grew 5.9%.

He said real GDP growth last year not only exceeded the 3.6% growth recorded in 2023 but also surpassed the Budget 2024’s initial projection of 4%–5%.

Amir Hamzah said the economic growth reflects the confidence of consumers and investors in the country’s economy.

He said private consumption continued to be the main contributor to GDP in 2024 at 60.7%, driven by increased demand for essential goods and services. Investment (gross fixed capital formation) recorded growth of 12% (compared with 5.5% in 2023), the highest since 2012.

“The increase in private investment, especially in high-tech sectors such as semiconductors, digital, and renewable energy shows investor confidence in Malaysia’s economic prospects and leads to high-paying jobs for the people,” he said.

Furthermore, Amir Hamzah said, GDP growth means higher government revenue, and this inflow of revenue allows for greater allocation for public benefit, which translates into improved cash assistance, improved salaries, more social protection and investments in basic infrastructure including healthcare, education and public transport.

Given the strengthening economic indicators, Amir Hamzah expressed confidence that the GDP growth momentum will continue and drive positive growth in 2025, as forecast, despite the challenging global environment.

He said Malaysia is directly involved in the global supply chain and adopts a neutral approach in dealing with other countries, including the United States and China, which are among the country’s main trading partners.

Trade with the US and China accounted for 11.3% and 16.8% respectively of Malaysia’s total trade in 2024.

Amir Hamzah said the country has also seen encouraging momentum in terms of foreign direct investment (FDI) commitments from various sectors and countries. “The FDI inflow contributed to the construction sector growth of 17.5% in 2024 compared with 6.1% in 2023,” he said.

Solid growth expected for rest of 2025

Malaysia’s economic growth is expected to remain solid at 4.9% year-on-year in 2025, according to local investment banks.

The banks said the forecast aligns with the Ministry of Finance’s (MoF) official target of 4.5% to 5.5% gross domestic product (GDP) growth in 2025.

Hong Leong Investment Bank Bhd (HLIB) noted that the country’s GDP growth is anticipated to stay strong but moderate slightly to 4.9% year-on-year in 2025, primarily supported by sustained household spending, underpinned by a strong labour market.

He said the projection was further supported by income measures including increases in national wages and higher cash handouts (RM13 billion in 2025; RM10 billion in 2024).

Hong said: “Higher realisation of foreign direct investments (FDI) projects, and continued tourism activities, will also contribute to overall growth.

“Bank Negara Malaysia [the country’s central bank] also sees upside risks to growth, such as a greater spillover from the tech upcycle, higher tourism activities and faster implementation of projects.”

Similarly, Maybank Investment Bank also maintained its 2025 real GDP growth forecast of 4.9%. It said: “Budget 2025 measures aimed at boosting workers’ income, such as increases in civil service salaries, pensions and the minimum wage, along with higher allocations for cash handouts to lower-income groups and expanded personal income tax reliefs, are expected to sustain consumer spending growth.”