KUALA LUMPUR, Jan 13 — Malaysia’s economy delivered robust growth across all sectors in 2024, setting the stage for further economic expansion this year, according to HSBC Global Research.

The financial institution has also upgraded its 2025 gross domestic product (GDP) forecast after Malaysia’s impressive recovery last year, and expects the ringgit to stabilise at RM4.60 to the US dollar.

"Malaysia’s recovery story continues strongly in 2024. After growing at a stellar rate of 5.1 per cent year-on-year in first half of 2024, the economy accelerated to 5.3 per cent year-on-year in third quarter of 2024.

"But more importantly, growth has been ‘on fire’ across all sectors,” said a press statement accompanying its Asian Outlook 2025 released today.

As a result, HSBC Global Research said it has revised its GDP growth forecast for 2024 to 5.2 per cent, up from 5 per cent, and upgraded the 2025 estimate to 4.8 per cent from 4.6 per cent.

This brings its projections closer to the upper end of the government’s forecast range of 4.8 per cent to 5.3 per cent for 2024, it said.

The report also highlighted Malaysia’s success in attracting foreign direct investments, particularly in technology sectors.

"Malaysia has positioned itself as a crucial link in the global tech supply chain. Several European and American companies recently decided to move to or expand their manufacturing facilities in the country amid ongoing trade tensions,” it said.

On the monetary front, it expects Bank Negara Malaysia to maintain its policy rate at 3 per cent throughout 2025, citing stable inflationary pressures while noting the upcoming subsidy rationalisation involving RON95 petrol.

"The good news is that the government is committed to delivering on its promises, announcing that RON95 subsidy rationalisation will begin in mid-2025,” it said, highlighting how it would impact only the top 15 per cent households.

The ringgit, which outperformed other Asian currencies last year, is forecast to settle at RM4.60 to the US dollar by the end of 2025.

The research house attributed this to government efforts to stabilise the currency and attract investment.