KUALA LUMPUR (Oct 13): Malaysia’s unemployment rate is expected to return to the pre-pandemic level at 3.4% in 2024, driven by expectations of better economic growth that should stimulate stronger labour demand and spur more solid growth in employment opportunities, according to the Ministry of Finance (MOF).

Total employment is expected to increase by 2% to 16.1 million people, with more than 80% of employment opportunities continuing to be provided by the services and manufacturing sectors, MOF said in its 2024 Economic Outlook report.

For 2023, the ministry projects the overall unemployment rate to be around 3.5%, with employment rising 2.6% to 15.8 million people.

“Efforts to uplift the wellbeing of the workforce and attract higher participation into the labour market, as outlined in the Madani Economy framework, will be carried out. These include strengthening skills training programmes to be more demand-driven, providing a more conducive working environment for women and expanding the social protection coverage for all workers,” said MOF.

The report said labour productivity is expected to increase by 2.9% to RM99,900 next year, with the services sector contributing the most. Similarly, average monthly wages and salaries are expected to increase by 4.7% to RM3,514.

“Strengthening the implementation of talent skills enhancement programmes and strategies to shift industrial structure towards technology-driven will also contribute to the improvement in labour productivity,” said MOF.

“Strategies outlined in the Midterm Review of the 12th Malaysia Plan and New Industrial Master Plan 2030 to create high-value job opportunities and accelerate industries’ technology adoption will contribute to higher compensation of employees (CE) in 2024, thus positioning the economy on track to realising the target of CE at 45% of GDP in the long-term,” it added.

Click here to read more about the Economic Report 2023/2024.