Malaysian economy slowed to 5% in Q4
Reading Time: 2 minutesMalaysia is taking a proactive approach to economic growth and trade, balancing its global partnerships while maintaining a non-aligned stance in an increasingly complex geopolitical landscape.
As Malaysian Prime Minister Anwar Ibrahim’s government pursued new trade agreements, economic growth slowed to 5% in the fourth quarter of 2024, raising debates about labour policies, technological shifts, and regional economic cooperation.
Malaysia’s economy grew by 5% in the final quarter of 2024, slightly down from 5.4% in the previous quarter, according to newly released government data. The slowdown comes amid global trade headwinds and ongoing adjustments to domestic policies aimed at long-term economic resilience.
Ibrahim vows to pursue trade diversity
Ibrahim has reaffirmed Malaysia’s commitment to a non-aligned foreign policy, emphasizing that the country will not be drawn into global power rivalries. Speaking at the China Conference: Southeast Asia 2025, Anwar warned against economic coercion and unilateral actions that could destabilize the region.
He stressed the importance of ASEAN’s collective strength in addressing AI disruptions, supply chain shifts, and tariff challenges, calling this “ASEAN’s moment” to shape the global economy.
Gov’t framework aims to cut wealth inequality
Domestically, Malaysia is implementing a progressive wage policy as part of the Madani Economic Framework (MEF), which seeks to boost labour productivity and create a more equitable income distribution. Analysts believe this initiative could drive economic growth by improving household incomes and increasing consumer spending.
The MF emphasises sustainable growth, equitable wealth distribution and the development of human capital. It envisions a more inclusive economy that not only addresses pressing issues such as income inequality and the cost of living but also sets the stage for long-term resilience in the face of global uncertainties.
By fostering innovation, enhancing digital infrastructure, and focusing on renewable energy, the MEF aims to elevate Malaysia’s competitive standing while ensuring that the benefits of economic progress are broadly shared across society.
Digital grows in importance
The digital economy remains a significant contributor to Malaysia’s GDP. A new report estimates that Grab’s on-demand services, including ride-hailing and food delivery, added nearly RM10bn to the economy in 2023. The report highlights the growing role of digital platforms in job creation and local business expansion.
As Malaysia moves into 2025, the government is focused on ensuring trade and economic policies remain strong, balancing external risks with domestic initiatives aimed at sustaining growth. With global trade realignments, labour reforms, and digital transformation shaping the economy, Malaysia is positioning itself for a pivotal year in its economic trajectory.