Malaysia’s economy expands on back of surge in investments, strong ringgit

The central bank said domestic spending will remain the main anchor for the economy, fuelling sustained growth

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Malaysia’s GDP rose 5.3 per cent in the July-September quarter from a year earlier. Photo: AFP

Published: 2:07pm, 15 Nov 2024

Malaysia’s economy expanded as expected in the third quarter, while remaining on track to meet official forecasts on a surge in investments and increased domestic spending.

Gross domestic product rose 5.3 per cent in the July-September quarter from a year earlier, matching the advance estimate and the median forecast in a Bloomberg News survey of analysts. On a sequential basis, the economy expanded 1.8 per cent from the previous three months, according to Malaysia’s central bank and statistics department on Friday.

Malaysia’s economy has largely recovered from last year, supporting officials’ optimism that the full-year figure may surpass the initial forecast of 4 per cent to 5 per cent expansion.

The finance ministry last month raised its annual growth projection to 4.8 per cent to 5.3 per cent, and sees further improvement next year as it looks to raise minimum wages and position the nation as a neutral haven for global investors with Donald Trump assuming the US presidency and potentially levelling tariffs against China.

While the outcome of the US election is set to lead to volatility in financial markets in the near term, Malaysia’s resilient economy will be able to withstand the pressure, BNM Governor Abdul Rasheed Ghaffour said at a briefing on Friday.

“What’s important to note is that we are entering this period from a position of strength,” he said. “Our growth is mostly domestic demand and Malaysia has a highly diversified economy and trade partners.”

The ringgit held a 0.2 per cent gain from earlier Friday as of 12:30pm in Kuala Lumpur.