Bank Negara Malaysia Annual Release 2023: Structural Reforms for Boosting Economic Growth

Global growth is expected to be sustained at 2.7%-3.2% in 2024 though moderated from 3.1% in 2023. The challenges to growth come from persistent tight monetary policy and the withdrawal of fiscal support, while mitigated by easing inflation, strong labour markets and an upturn in global trade, especially the technological cycle. 

Global growth outlook remains subject to downside risks - higher-than-expected inflation, tighter financial conditions and geopolitical escalations. 

Output gap is expected to turn positive (3.5%–4.5% in 2024). The actual output growth of 4.0%– 5.0% is projected to grow at a faster pace, underpinned by continued expansion in domestic demand and improvement in external demand.

Over the medium term, potential output will remain supported by higher investments and improvements in productivity amid continued implementation of multi-year investment projects as well as national masterplan such as New Industrial Master Plan (NIMP) 2030 and National Energy Transition Roadmap (NETR) with a projected growth rate of 4%–5%, reverting to the pre-crisis level.