The World Bank has raised its projection for Malaysia’s economic growth in 2024 to 4.9%, an increase of 0.6 percentage points from its earlier forecast of 4.3% in April 2024. This revision reflects Malaysia’s stronger-than-expected performance in the first half of the year, driven by robust consumption, investment, and trade activity.
Malaysia’s economic recovery appears solid, with a notable second-quarter growth rate of 5.9% exceeding expectations. The country’s open trading economy has also benefited from a stabilizing global growth rate of 2.6%, despite geopolitical uncertainties and high-interest rate pressures. Inflation remains under control at below 2%, though slightly higher than in recent quarters. Investment trends are also positive, with year-on-year growth in both foreign direct investments (FDI) and domestic investments. The World Bank anticipates Malaysia achieving high-income status by 2028, consistent with its earlier 2021 projection for the period between 2024 and 2028.
Labor market indicators have shown encouraging improvement, with the national unemployment rate returning to pre-pandemic levels of 3.3% in Q2 2024. However, skill-related underemployment remains a significant challenge, marked by a mismatch between the number of high-skilled job vacancies and the growing number of graduates entering the workforce. In 2023, Malaysia produced approximately 288,000 graduates, but there were only 48,700 high-skilled job openings. This highlights the critical need for structural adjustments in the labor market to harness the country’s economic growth potential completely.
(Sources: The Sun Daily; The Edge Malaysia)
