Malaysia’s 2023 GDP growth lower than expected

Malaysia’s 2023 GDP growth lower than expected (Photo:theedgemalaysia.com)

Gross domestic product (GDP) grew 3.4% in the October-December period from a year ago, according Malaysia’s Department of Statistics (DOSM).

A slowdown in construction and stagnant manufacturing activity weighed on the economy, which grew 3.8% all of last year, below the central bank’s estimate of about 4% expansion in 2023.

Malaysia is grappling with falling exports that have been dragged by China’s sputtering economy. Shipments of goods abroad fell 10% from a year earlier in December with sales to China, its largest trading partner, shrinking 1.5%.

According to Malaysia's Ministry of Investment, Trade and Industry, the country's trade in 2023 exceeded 2 trillion MYR (nearly 424 billion USD) for the third consecutive year at 2.640 trillion MYR, but recorded a decrease of 7.3% compared to 2022.

In 2023, Malaysia's major trading partners included ASEAN, China, the US, the EU, and Japan. Among them, ASEAN remained an important trade partner, accounting for 27.3% of the country's total trade in 2023, reaching 720.66 billion MYR. The top three export destinations in ASEAN were Singapore, Thailand, and Vietnam, accounting for 78.5% of Malaysia's total export turnover to the region.

China has been a major trading partner of Malaysia for 15 consecutive years since 2009, accounting for 17.1% of total trade. It has also been Malaysia's largest source of imports since 2011, accounting for a 21.3% share of total imports by 2023.

Malaysia's Ministry of Finance forecast that the Southeast Asian country's trade will increase by 5% in 2024 while exports and imports are estimated to increase by 5.1% and 4.9%, respectively.

In addition, 2024 will also witness important political changes, with major elections expected to take place in Malaysia's important trading partners, especially the US, the Republic of Korea, Indonesia, and India, which could have a significant impact on trade and international relations./.