KUALA LUMPUR, Feb 16 (Bernama) — Malaysia recorded a gross domestic product (GDP) growth of 3.7 per cent in 2023, after an expansion of 3.0 per cent in the fourth quarter (4Q) of the year, supported by continued recovery in economic activity and labour market conditions.
Bank Negara Malaysia (BNM) said growth moderated amid a challenging external environment last year, following the strong growth of 8.7 per cent registered in 2022.
On a quarter-on-quarter seasonally-adjusted basis, the economy contracted by 2.1 per cent compared with a growth of 2.6 per cent in 3Q.
“On the domestic front, despite the lapse of large policy support provided as the economy started to open up in 2022, the continued recovery in economic activity and labour market conditions supported growth in 2023,” the central bank said in a statement Friday. It said that the current account surplus in 2023 was sustained at 1.2 per cent of GDP, supported by a diversified export structure across markets and products, despite the challenging external environment.
“The strength in external position is also reflected in the external debt, which declined to 68.2 per cent of GDP in 2023 (3Q 2023: 69 per cent), and a higher net international investment position at 6.6 per cent of GDP in 2023 (3Q 2023: 5.2 per cent).
BNM highlighted that importantly, the external debt remains manageable given the favourable maturity and currency profiles.
It said one-third of the external debt is denominated in ringgit, limiting currency risk, while around 70 per cent of debt has medium and longer-term tenures.
Foreign currency borrowings are also subject to BNM’s prudential requirements and continue to consist mainly of concessionary intragroup loans.
Meanwhile, growth in investment activity was underpinned by the progressive realisation of multi-year projects and capacity expansion by firms.
Exports, however, remained subdued due to prolonged weakness in external demand amid stronger imports. On the supply side, there was a broad-based expansion.
As for the ringgit, the currency appreciated by 2.1 per cent against the US dollar in 4Q 2023, in line with regional currencies following a broad-based depreciation in the US dollar.
“BNM will continue to ensure sufficient liquidity to support the orderly functioning of the domestic foreign exchange market,” it noted.
For 2024, it said growth will be driven by resilient domestic expenditure and improvement in external demand, with the International Monetary Fund projecting a rebound in global trade growth from 0.4 per cent in 2023 to 3.3 per cent in 2024.
Improvement in tourist arrivals and spending are expected to continue.
— BERNAMA
