Malaysia’s economy expanded by 4.8% in the fourth quarter of 2024 compared to the same period the previous year, according to preliminary estimates released on Friday.

This marks a slowdown from the 5.3% growth recorded in the third quarter, attributed to weaker performance in the agriculture and mining sectors.

For the full year, economic growth is projected to reach 5.1%, a significant improvement from the 3.6% growth achieved in 2023, the statistics department announced.

“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.”

The Q4 growth was primarily driven by a 5.3% annual increase in the services sector, alongside contributions from the manufacturing and construction industries, Reuters news agency reports.

However, the agriculture sector contracted by 0.6%, driven by a decline in the oil palm sub-sector, while the mining and quarrying sector shrank by 1.4% due to a downturn in the crude oil and condensate sub-sector, according to the statistics department.

“Economic growth is supported by strong domestic demand and a recovering external sector, alongside strategic investments in areas like renewable energy and digital infrastructure,” said Chief Statistician Mohd Uzir Mahidin in the statement. 

He noted that rising tourist arrivals and higher civil servant salaries are expected to stimulate household spending and retail activity, further enhancing overall economic growth.

In addition, in a separate survey by Bloomberg News, economists predict Malaysia's economy will grow by 4.7% in 2025, near the lower range of the official forecast of 4.5% to 5.5%. Meanwhile, all analysts surveyed anticipate the central bank will maintain the policy rate at 3% during its first meeting of the year on 22nd January.

The final GDP figures for the fourth quarter and the full year of 2024 are scheduled for release on 14th February.