KUALA LUMPUR - Malaysia's economy is poised for a 4-5% GDP growth this year, as stated by Bank Negara Malaysia Governor Datuk Shaik Abdul Rasheed Abdul Ghaffour. Today's announcement highlighted the nation's economic resilience, underlined by strong domestic demand and a diversified economic structure. Key sectors like the automotive industry have shown positive trends, contributing to the overall private consumption that drives the forecasted growth.
The Malaysian economy demonstrated a solid performance with a year-over-year (YoY) increase of 3.3% in the third quarter of 2023, despite facing external headwinds and weakened exports. The central bank's report revealed that lower costs for non-core items such as fresh food and fuel, along with more affordable core services, led to an easing in headline inflation, which settled at 2% during Q3 after decreasing from 2.8% in the previous quarter.
Governor Abdul Rasheed confirmed that the country's economic strength is also supported by its robust infrastructure and progress in multi-year projects. This includes a rebound in tourism sector activities, which have further strengthened domestic demand. Despite global economic uncertainties and continuous financial market volatility, Malaysia's economy is expected to maintain its momentum with an estimated 4% growth for this year.
Looking ahead to 2024, the central bank anticipates an optimistic expansion of between 4-5%, backed by continued strong domestic consumption patterns. This outlook remains firm even with an upcoming service tax hike to 8%. Furthermore, expected rate decreases by the US Federal Reserve next year should ease the impact on Malaysia's currency, potentially lending strength to the ringgit’s value moving forward.
Today's press conference also addressed concerns over the strong US dollar. However, Governor Abdul Rasheed expressed confidence that Malaysia’s diversified economy can absorb these changes and maintain its growth trajectory. The positive vehicle sales figures stand as evidence of robust private consumption, which is a cornerstone of the country's economic forecast.
In summary, Malaysia's economic indicators point towards sustained growth and stability, with a diversified economy that continues to navigate through external challenges while capitalizing on internal strengths.
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