By Nurunnasihah Ahmad Rashid
KUALA LUMPUR, Jan 21 (Bernama) -- Malaysia is projected to sustain robust economic growth in 2025 despite facing external challenges, driven by resilient domestic demand, surging foreign investments, and recovery in global technology demand.
The Malaysian economy is expected to expand by 5.0 per cent in 2024, similar to Indonesia’s growth but trailing Vietnam and the Philippines, according to the chief economist of the ASEAN+3 Macroeconomic Research Office (AMRO) Dr Hoe Ee Khor.
“This momentum is expected to continue, supported by wage hikes, government cash assistance, and favourable labour market conditions, which are boosting domestic consumption.
“Public infrastructure projects such as the East Coast Rail Link, the Johor Bahru-Singapore Rapid Transit System, and the Pan Borneo Highway are also key contributors,” he told Bernama.
He said Malaysia’s diversified export base, particularly in electronics and semiconductors, is set to benefit from the ongoing upswing in the global tech cycle.
“Global semiconductor sales are expected to grow by double digits in 2025, positioning Malaysia to capitalise on its assembly and testing services despite its limited exposure to advanced chips for artificial intelligence.
“The nation’s strategic focus on becoming a regional hub for the digital economy and green technology continues to attract investments from global tech giants such as Google, Amazon Web Services and Microsoft.
“This diversification away from traditional sectors like oil and gas is strengthening Malaysia’s economic resilience while advancing its sustainability goals,” he added.
Khor said Malaysia stands to gain from the restructuring of global supply chains, as geopolitical tensions prompt multinational companies to adopt the “China plus one” strategy, with the country’s robust industrial base, well-developed infrastructure and stable political environment making it a preferred destination for foreign direct investment.
On the trade front, Malaysia’s exports remain resilient due to a diversified portfolio of products and markets, he said.
“Its strong network of free trade agreements (FTAs), including the newly concluded Malaysia-UAE Comprehensive Economic Partnership Agreement and the soon-to-be-finalised Malaysia-South Korea FTA, is enhancing its competitiveness in global markets.
“As ASEAN chair in 2025, Malaysia is expected to deepen economic ties within the region and beyond, particularly with the Gulf Cooperation Council,” he said.
Despite these positive developments, Malaysia faces risks from potential US tariff escalations and tighter global financial conditions, although the government has taken proactive measures to mitigate these risks, including subsidy rationalisation, widening the revenue base, and strengthening fiscal management through the Public Finance and Fiscal Responsibility Act, Khor noted.
He said Malaysia’s fiscal consolidation efforts, coupled with long-term initiatives like the New Industrial Master Plan 2030 and the National Energy Transition Roadmap, will support sustainable growth while improving public debt stability.
-- BERNAMA
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