KUALA LUMPUR (Dec 7): Malaysia is expected to experience economic expansion in 2024 due to an anticipated rebound in international trade, the introduction of affirmative government policies, the ongoing recovery of China's economy, and the possible suspension of rate hikes by the US Federal Reserve, according to MIDF Research.
Along with the government policies like the National Energy Transition Roadmap (NETR) and the 12th Malaysia Plan, MIDF Research head of research Imran Yassin Md Yusof said positive job market conditions, income growth and continued recovery in the tourism sector would also support the domestic spending outlook.
"With those drivers, we expect the market and the economy will just cruise along. But there are two main downside risks, namely possibility of a US [economic] recession and geopolitical risks such as the heightening conflict in the Middle East as well general elections in several countries next year, including the US presidential election," he said at the media briefing for MIDF’s 2024 market outlook presentation.
The research house is forecasting Malaysia's economy, as measured by gross domestic product (GDP), to grow by 4.7% in 2024, with resilient domestic demand to continue as a key driver.
However, it noted that global economic growth is expected to moderate to 2.9% in 2024, below the average of 3.8% growth throughout 2010-2019.
Several downside risks to the global growth outlook include policy tightening by central banks to tackle inflation, causing economic activity to cool; economic fragmentation and geopolitical risks; and disruption and fluctuations in the commodity markets, with differing effects across countries.
"While global production activities could pick up, recovering from the lows this year, consumer spending will remain a key factor to support growth next year on the back of easing inflation, healthy labour market and rising income.
"For trading countries, growth prospects will be more encouraging in 2024, benefiting from the recovery in global production and trade activities, but potentially limited by the expected slowdown in demand from the advanced economies," Imran said.
Imran also said commodity prices are expected to remain stable, with crude palm oil seen averaging RM3,600 per tonne and Brent oil prices averaging US$84 (RM392.74) per barrel next year.