Malaysia's economy is projected to sustain last year's growth momentum and surpass 5% by 2025, driven by robust foreign direct investments (FDI) and support from local funds. The country is on a positive trajectory, with the government on track to exceed its deficit target for 2023. The Malaysian government, under Prime Minister Anwar Ibrahim, is focused on restoring fiscal health and driving economic resurgence.
Malaysia’s growth is set to sustain last year’s pace and exceed 5% in 2025, as strong foreign direct investments and support from local funds shield the economy from any global risks, Second Finance Minister Datuk Seri Amir Hamzah Azizan said. The country is already on a positive track, with the government likely beating last year’s deficit target of 4.3% of gross domestic product, Amir said in an interview with Bloomberg Television’s Haslinda Amin.
The government plans to narrow the gap further to 3.8% of GDP this year. \'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,” Amir said in the administrative capital of Putrajaya late Wednesday.'We are confident that we’ll have a good year.” Restoring fiscal health is key for Malaysia to retain emerging Southeast Asia’s highest credit score as Prime Minister Anwar Ibrahim’s government restores political stability and drives the nation’s economic resurgence. \Officials previously said they expect GDP to grow by about 4.5% to 5.5% this year, largely exceeding the 4.7% expansion predicted by analysts surveyed by Bloomberg. Malaysian government-linked investment companies, which manage almost 2 trillion ringgit ($444 billion) in assets combined, have also boosted their direct investments in the economy, Amir said. That’s helping to fuel growth, he added. 'Traditionally GLICs will invest, plus or minus, nearly half a trillion ringgit over a five-year period,” he said.'They’re boosting it up by another 120 billion over a five-year period. So that’s a fairly significant step up.” \Higher salaries for civil servants, as well as plans to increase the minimum wage in the private sector, are also poised to boost domestic demand. The strength of the Malaysian economy and foreign direct investments will continue to support the ringgit, Amir said. 'Imports are measured, exports are growing still, and supportive mechanisms allow us better tools to use to cushion blows,” he said. The Malaysian currency was the best performer across emerging markets in 2024. It strengthened 2.7% against the dollar, ending three consecutive years of declines. Amir said he is confident that the nation’s diversified economy will withstand the threat of Donald Trump’s tariffs and trade wars that has rattled developing-nation assets. 'Despite the choppiness in the global market, where we are today, I think we’ve got enough resilience to ride it through,” Amir said.
MALAYSIAN ECONOMY FDI INVESTMENTS GROWTH DEFICIT
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