KUALA LUMPUR (Feb 14): Malaysia’s economy expanded faster than expected in the final quarter of 2024, mainly driven by household spending and business investments while exports rose, official data showed.

Gross domestic product (GDP) grew 5% in the fourth quarter of 2024, according to Bank Negara Malaysia. The rate is higher when compared to the official flash estimate of 4.8% but a tad slower than the third quarter’s revised 5.4% year-on-year growth.

On a seasonally adjusted basis, GDP had however declined 1.1% quarter-on-quarter.

For the year as a whole, the Malaysian economy grew by 5.1% in 2024, sharply higher than the 3.6% in 2023.

Growth of the Malaysian economy going forward will be driven by robust expansion in investment activity, resilient household spending and expansion in exports, said Bank Negara Governor Datuk Seri Abdul Rasheed Ghaffour.

Malaysia’s strong fundamentals will provide support to the economy amid a challenging global environment, he said in a statement.

Data out earlier on Friday show that Singapore’s GDP grew 4.4% in 2024. Indonesia expanded 5% last year and Philippines 5.6%, while Vietnam’s economy grew at blistering pace of over 7%. Thailand will announce its GDP data next week.

In the fourth quarter, private consumption rose 4.9%, thanks to positive labour market conditions and policy, while private investment was 12.7% higher, on the back of new and existing projects. Public consumption, meanwhile, grew 3.3% and public investment increased 10%. Exports on a net basis surged 58% year-on-year.

On the supply side, the services sector — which accounted for half of the economic output — expanded 5.5%, driven by both consumer and business-related sub-sectors, while the key manufacturing sector advanced 4.4%, driven by the electrical-and-electronics cluster.

However, the agriculture output contracted 0.5% on lower palm oil production, and mining activities was down 0.9%, dragged by lower crude oil production. Construction activities rose 20.7%, with robust activities in the residential, non-residential and special trade.

On inflation, the central bank said easing global cost conditions and the absence of excessive domestic demand pressures will keep the general increase in prices manageable in 2025.

“While the recently-announced domestic policy reforms would contribute to some upward pressure on prices, the overall impact on inflation is expected to be contained,” BNM said. “Nevertheless, upside risks could arise from larger cascading effects from policies to broader prices.”

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