KUALA LUMPUR, Jan 9 — Malaysia’s economic growth is poised to sustain last year’s momentum, with expectations to surpass 5 per cent in 2025, supported by strong foreign direct investments and local funds.
Finance Minister II Datuk Seri Amir Hamzah Azizan highlighted that these factors are shielding the nation’s economy from global risks, Bloomberg reported yesterday.
“We have a good base because foreign direct investments remain strong, and a lot of activity that’s generated is now playing out through the economy,” he said in the interview with Bloomberg.
He added that the government is on track to exceed its deficit target of 4.3 per cent of GDP for last year, with plans to narrow the gap further to 3.8 per cent this year.
According to Bloomberg, restoring fiscal health is crucial for Malaysia to maintain its position as the top-rated credit score in emerging South-east Asia, as Prime Minister Datuk Seri Anwar Ibrahim’s government works to stabilise the nation and drive economic recovery.
Citing its own analysts’ prediction, Bloomberg added that the government is confident that GDP will grow between 4.5 per cent and 5.5 per cent this year, surpassing the 4.7 per cent growth.
Amir noted that Malaysia’s government-linked investment companies (GLICs) play a significant role in driving growth.
“Traditionally GLICs will invest, plus or minus, nearly half a trillion ringgit over a five-year period.
“They’re boosting it up by another 120 billion over a five-year period. So that’s a fairly significant step up,” he said in the interview.
Higher salaries for civil servants and plans to raise the minimum wage in the private sector are also expected to bolster domestic demand.
The strength of Malaysia’s economy, coupled with foreign direct investments, will continue to support the ringgit, Amir affirmed.
“Imports are measured, exports are growing still, and supportive mechanisms allow us better tools to cushion blows,” he said.
The ringgit was the best performer in emerging markets in 2024, appreciating by 2.7 per cent against the US dollar after three consecutive years of decline.
Despite global uncertainties, including trade wars and tariff threats, Amir expressed confidence in Malaysia’s resilience.
“Despite the choppiness in the global market, where we are today, I think we’ve got enough resilience to ride it through,” he said.