Highlights of BNM Annual Report 2023


Below are the important reports regarding Malaysian economic data recorded by Bank Negara Malaysia (BNM) throughout the year 2023 and the forecast for 2024 announced this morning.

1. Unemployment Rate

Bank Negara Malaysia expects wages to continue to rise in 2024 following last year's slowdown and the unemployment rate is likely to remain as stable as last year.

According to the Economic and Financial Review 2023, employment reports are projected to continue to grow due to continued demand amid continued recovery in tourism-related sectors and foreign trade activities.

BNM predicts the unemployment rate will stabilize around its historical average of 3.3% in 2024.

2. Subsidy

The effects of reform measures such as subsidy rationalization are temporary and they do not require monetary policy intervention.

Malaysia is slated to expand its subsidy rationalization efforts through targeted subsidies for diesel and petrol which are expected to be launched this year at the time of an increase in the subsidy bill up to RM81 billion estimated in 2023 alone.

3. Gross Domestic Product (GDP)

The central bank expects Malaysia's GDP growth to rebound to 4% to 5% this year compared to 3.7% in 2023. Inflation is expected to range between 2% to 3.5% in 2024 compared to 2.5% in 2022.

4. Domestic Economy

BNM predicts a positive increase in the expected GDP report 2024 driven by resilient domestic spending and with additional support stemming from the expected recovery in exports.

5. Malaysian Ringgit (RM)

The movement of the ringgit which has decreased by 3.9% against the US dollar and by 3.7% against its main trading partners in terms of nominal effectiveness in recent times does not reflect the fundamentals of the country's economy.

The central bank also warned that future movements in the value of the currency may still be turbulent even though the ringgit's pressure is expected to ease as the global tightening cycle nears its end.

BNM insists that the weakening ringgit will harm the domestic economy.

6. Inflation Rate

Headline and core CPI are likely to remain moderate this year amid stable demand and contained price pressures though there is a risk of upside.

The consumer price index (CPI), Malaysia's main measure of inflation, is expected to increase by 2% to 3.5% in 2024 from 2.5% in 2023.

Core CPI, which measures domestically-driven inflation, will reach 2% to 3% compared to an average of 3% in 2023. That is still above its long-term average amid growing domestic demand and expected further wage increases.