By Rahul Trivedi
BENGALURU (Reuters) – Economic growth in Malaysia probably softened in the last quarter of 2024 as weakness in manufacturing, agriculture and mining overshadowed strong household spending, a Reuters poll of economists found.
Although most major sectors except for services experienced sluggish growth in the October-December quarter, domestic demand – supported by the lowest unemployment rate in nearly a decade at 3.1% in December – helped sustain growth.
Southeast Asia’s third-largest economy expanded 4.8% in the last quarter, in line with a preliminary estimate released in January, compared with the same period the previous year, according to a Feb. 6-11 Reuters poll of 18 economists.
Forecasts for the final data due to be released on Friday ranged from 4.2% to 5.3%.
If the consensus proves accurate, growth would have slowed from 5.3% in Q3 2024.
“The consumption side holds on relatively resiliently. Close to 5% growth in the current circumstances is not a bad outcome even though it’s a little bit of a pullback from a fairly strong third quarter,” said Brian Tan, senior regional economist at Barclays.
However, for 2025, Tan voiced concern about the potential impact of U.S. President Donald Trump’s tariffs on exports – a key driver of Malaysia’s economy, which grew 5.7% last year.
“We are in a situation where we’ve got (U.S.) tariff announcements coming left and right, and that will put pressure on the exports,” Tan added.
That – along with a slowdown in global demand, particularly from China, Malaysia’s largest trading partner – poses a significant risk to the growth outlook.
A separate Reuters poll forecast growth to average 4.7% in 2025, following a predicted 5.1% expansion in 2024, placing it at the lower end of the government and central bank’s forecast range of 4.5% to 5.5%.
“We think economic growth will soften further,” said Gareth Leather, senior Asia economist at Capital Economics.
“We expect global commodity prices to decline over the coming quarters, which will also weigh on economic activity in Malaysia. Global demand is also set to remain weak in the near term, which will hold back exports.”
(Reporting by Rahul Trivedi; polling by Anant Chandak; editing by Mark Heinrich)
