Malaysia’s economy is navigating notable policy shifts, with its recent BRICS partnership positioning it for expanded trade influence. Upcoming tax reforms reduced petrol subsidies for the wealthiest, and a record budget underscore the government’s focus on fiscal sustainability and social welfare amid rising inflation.
Malaysia economy update
- Malaysia has joined the BRICS alliance as a partner country, announced on October 26, alongside Thailand and Indonesia. This follows Prime Minister Anwar Ibrahim’s confirmation in July of Malaysia’s application for BRICS membership, which originally included Brazil, Russia, India, and China as its founding members.
- Malaysia will introduce a new dividend income tax and expand its sales and services tax next year, as announced by Prime Minister Anwar Ibrahim. This comes alongside a record projected expenditure of 421 billion ringgit (about $98 billion) for 2025, up 7% from 2024, driven by rising public sector costs.
- Malaysia plans to cut petrol subsidies in mid-2025, with the wealthiest 15% paying full price for RON95 fuel. This move is expected to save RM8 billion annually but may increase inflation.
- Malaysia’s inflation increased by 1.8% year-on-year in September 2024, falling short of expectations set by economists who had anticipated a 1.9% rise. The inflation index reached 133.2, driven mainly by a slower increase in categories like personal care and miscellaneous goods.
- Malaysia’s Producer Price Index (PPI) declined to 2.1% year-on-year in September 2024, marking the end of seven months of growth. The mining sector saw the largest decrease, with a significant drop of 16.1% compared to 8.3% in August.
Malaysia stock market update
In October, Malaysia’s key stock market indices experienced varied movements: the FTSE Bursa Malaysia KLCI fell by 3.3% to RM1,601.69, while the FTSE Bursa Malaysia Mid 70 Index rose slightly by 0.4% to RM17,602.87. Meanwhile, the FTSE Bursa Malaysia Top 100 Index dropped 2.26% to RM11,814.1, reflecting mixed investor sentiment amid economic uncertainties.
- CelcomDigi has partnered with AmBank to provide affordable digital healthcare solutions for Malaysian medical providers over the next three years. This collaboration aims to enhance the healthcare system by enabling better diagnostics and personalized treatments, ensuring improved access and support for medical providers nationwide.
- AME Elite Consortium and Kuala Lumpur Kepong have entered a joint venture to develop an industrial park in Ijok, Selangor. This partnership combines KLK’s first industrial property project with AME Elite’s expertise in sustainable industrial spaces, aiming to create a green-focused park that meets diverse industrial needs.
- Fakhrunniam Othman has officially taken over as FGV Holdings’ Group CEO, effective November 1, 2024, following a leadership transition. He brings extensive experience from his previous roles within FGV and in international finance.
- MN Power Transmission, a subsidiary of MN Holdings, secured an RM63 million contract from Tenaga Nasional for extending a 132KV overhead lines battery energy storage system interconnection facilities bay. The company must provide RM3.15 million in performance security, which is 5% of the contract value.
- Kerjaya Prospek Group Bhd, through its subsidiary, secured two contracts totaling RM34.4 million for development works in Penang and Selangor. The projects, starting on November 5, 2024, are expected to be completed within 18 months.
Malaysia’s top gainer and top loser stocks for October
Summary
Malaysia’s evolving economic landscape shows a commitment to modernization and fiscal responsibility, with initiatives targeting social equity, industrial development, and regional trade. However, upcoming challenges, such as inflation impacts from subsidy cuts, will require careful balancing to maintain growth and stability.
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