Positive economic growth of the Madani Government

18 February 2024

By Wartawan Nabalu News

KUALA LUMPUR: Despite challenging external conditions, the country's economy recorded a 3% growth in the fourth quarter of 2023 (Q4 2023), supported by resilient domestic demand, which increased by 5.2% in Q4 2023 (Q3 2023: 4.8%). This increase helped offset the 3.2% decline in external trade due to weakened global demand.

In a statement Dato' Seri Anwar Ibrahim, the Prime Minister and Minister of Finance stated that overall, the country's economy has returned to normal with a 3.7% growth in 2023 following the robust growth recorded in the previous year (2022: 8.7%). The overall growth in 2023 is slightly lower than the 2024 Budget projection of around 4%.

“The growth in Q4 2023 was supported by the improvement in the economic fundamentals, including, the labor market that recorded positive growth momentum, with the unemployment rate decreasing to pre-pandemic levels of 3.3% in Q4 2023 (Q3 2023: 3.4%). Inflation moderated to 1.6% (Q3 2023: 2%), demonstrating the effectiveness of the Government's strategy in targeting non-disruptive subsidies to the overall economy.”

In December 2023, the inflation rate eased to 1.5%, lower than that of other advanced and regional economies such as the Eurozone (2.9%), South Korea (3.2%), the United States (3.4%), the Philippines (3.9%), and Indonesia (2.6%). Net foreign direct investment (FDI) recorded RM17.1 billion in Q4 2023 (Q3 2023: RM7.2 billion).

"The continuous growth in domestic demand indicates that the reform agenda by the MADANI Government is beginning to yield positive results. In addition to the continuous fiscal restructuring benefiting the Government and the people, efforts to improve governance and facilitate business transactions have stimulated economic activities, thereby restoring investor confidence in Malaysia," the Prime Minister stated.

Following the mapping of Malaysia's new economic growth strategy through the MADANI Economy framework, the Government will expedite its implementation this year to stimulate new economic growth and realize social reform and justice.

"The MADANI Government is confident in achieving stronger growth of between 4% and 5% in 2024, supported by the strong foundation and reforms outlined in the MADANI Economy and the Second MADANI Budget," Dato' Seri Anwar said.

"The Government is committed to further reducing the fiscal deficit to 4.3% this year, in line with the commitments in the Public Finance Act and Fiscal Responsibility 2023. The Government has successfully reduced the fiscal deficit to 5% in 2023 from 5.6% in 2022."

The MADANI Economy emphasises the importance of revitalizing Malaysia's economy not only to address long-standing systemic challenges but also to focus on sustainable and resilient growth areas.

The 2024 Budget emphasises the Government's commitment to responsible fiscal management and subsidy realignment. Savings from these measures can be channeled as assistance to vulnerable groups, improve infrastructure, and public services.

Meanwhile, the strategies and initiatives under the National Energy Transition Plan, the Master Plan for New Industries 2030, and the Mid-Term Review of the Twelfth Malaysia Plan will drive quality investment in high value-added industries, especially in high-technology, energy transition, and digital industries, creating more high-income job opportunities for the people, he stated.