The country’s encouraging performance in the third quarter (3Q) of the year provides a strong signal for a positive trajectory to achieve the resilience needed to support the Madani Economy initiatives, said Prime Minister Anwar Ibrahim.
Gross domestic product (GDP) increased by 3.3 percent in 3Q, bringing growth in the nine months of 2023 to 3.9 percent, driven by domestic demand amid global conditions remaining weak and uncertain.
Anwar, who is also the finance minister, said the dynamic domestic demand reflects the Madani government's continuous efforts to restore the vitality of the economy.
He said the government’s fiscal reforms at the initial stage generated savings and higher revenue that was redistributed to the people directly or indirectly.
“The labour market continues to improve with the unemployment rate decreasing to 3.4 percent in 3Q, which is a reduction in the number of unemployed by 1.4 percent compared to the previous quarter.
“Inflation also moderated to two percent compared to 2.8 per cent in 2Q, which was supported by consumer subsidies by the government to offset the increase in the price of services and food,” Anwar said in a statement issued by the Finance Ministry today.
He noted that Budget 2024 will effectively realise fiscal and economic reforms by the government by introducing more initiatives to achieve the vision set in the Madani Economy.
“The government will continue to reduce the fiscal deficit from five percent in 2023 to 4.3 percent in 2024, and it remains steadfast in its stance of expanding the fiscal policy to support Malaysia's economic growth and ease the burden of the people's cost of living,” said Anwar.
According to the ministry, domestic demand surged by 4.8 percent in 3Q with a resilient labour market and supported by a strengthening tourism sector.
Expansion in some sectors
On the supply side, Malaysia’s economic growth was driven by expansion in the services sector (five percent), agriculture (0.8 percent) and construction (7.2 percent).
“However, the growth was offset by small contractions in the manufacturing (0.1 percent) and mining and quarrying (0.1 percent) sectors.
“Meanwhile, total trade shrank by 15.7 percent to RM653.3 billion,” it said.
The ministry also said the government will continue the implementation of economic reforms as stated in the Madani Economy: Empowering the People framework, which is supported by the National Energy Transition Roadmap, the New Industrial Master Plan 2030 and the Half-Term Review of the 12th Malaysia Plan.
“However, geopolitical tensions have had a domino effect, following continued disruptions in international supply chains and rising global interest rates.
“The situation culminates in a decline in external demand which exposes the country’s economy to risks that may persist in the medium term,” it said.
- Bernama
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