(Bloomberg) -- Malaysia’s economy expanded at a slower clip in the fourth quarter, signaling a challenging road ahead as the trade-reliant nation contends with heightened global risks.
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Gross domestic product rose 4.8% in the October-December period from a year ago, according to advance estimates from Malaysia’s Department of Statistics on Friday. That’s below the 5.2% median estimate in a Bloomberg News survey and the 5.3% expansion in July to September, marking a second straight quarter of slower growth.
For the full year, the economy increased 5.1% in 2024, putting it within the government’s projection of a 4.8% to 5.3% growth and faster than the 3.6% pace in 2023. The final figures will be released on Feb. 14.
“It is not the home run analysts were expecting but signals strong momentum nonetheless,” said Lavanya Venkateswaran, economist at Oversea-Chinese Banking Corp. “We maintain our 2025 GDP growth forecast of 4.5% and expect Bank Negara Malaysia to remain on hold in 2025.”
While officials remain optimistic about the country’s growth amid improving foreign investments, uncertainty over the impact of Donald Trump’s trade policies threatens to undermine the economic recovery seen taking place in Malaysia. Plans of the incoming US president to roll out tariffs, as well as China’s disappointing growth, may weigh on global demand.
Growth during the quarter was driven by the services sector. Advances in the manufacturing and construction industries slowed, while agriculture declined the last three months of 2024.
The ringgit was little changed at 4.5017 against the dollar at 12:39 p.m. in Kuala Lumpur while the benchmark FTSE Bursa Malaysia KLCI Index climbed as much as 0.5%.
In a separate Bloomberg News survey, economists expect Malaysia to expand 4.7% in 2025, near the lower-end of the official projection of 4.5% to 5.5%. All analysts surveyed so far expect the central bank to keep the policy rate steady at 3% at its first meeting this year on Jan. 22.
“Recent increases in tourist arrivals and civil servant pay are expected to further boost household spending and retail activity, contributing positively to overall economic momentum,” Mohd Uzir Mahidin, chief statistician of Malaysia, said in a statement.
