MGCC Pressespiegel - 18.12.2024

CIMB Securities highlights Malaysia's strategic position to benefit from trade shifts due to potential US trade policies, particularly the "China Plus One" strategy. Malaysia's role as a key transit point for trade from China to the US, along with its competitive infrastructure and production costs, helped boost foreign direct investments during the 2018 trade war. The country is expected to capitalise on trade diversification in sectors like electronics, chemicals, and palm oil. Additionally, Malaysia's status as a BRICS partner protects it from proposed US tariffs on BRICS nations. CIMB also forecasts modest ringgit appreciation by 2025 and anticipates a 5% GDP growth for Malaysia in 2025.

Source

Both Malaysia’s ruling Pakatan Harapan (PH) coalition and the opposition Perikatan Nasional (PN) are facing unity challenges following recent developments involving key leaders. Speculation about International Trade and Industry Minister Tengku Zafrul possibly switching from UMNO to PKR has sparked tension within PH, along with talk of him potentially becoming Selangor's chief minister. Meanwhile, PN was rocked by the resignation of Terengganu chief minister Ahmad Samsuri Mokhtar from his role as PN treasurer-general. Despite these issues, analysts believe the political landscape is unlikely to change drastically in the short term, though they stress the need for immediate resolutions. 

Source

Former Thai Prime Minister Thaksin Shinawatra will serve as a "personal adviser" to Malaysian Prime Minister Anwar Ibrahim when Malaysia chairs ASEAN next year, supported by a team from various ASEAN nations. Anwar emphasised the value of Thaksin’s experience in guiding ASEAN’s leadership. Thaksin, who was ousted in 2006 and lived in exile for 15 years, returned to Thailand in 2023, serving a short sentence for corruption before being released on parole. During a visit by Thai Prime Minister Paetongtarn Shinawatra to Malaysia, Anwar also discussed boosting bilateral trade with Thailand, aiming for USD30 billion by 2027, and enhancing regional cooperation, including addressing flooding along the border. The visit saw the signing of two memorandums of understanding on cultural and economic cooperation.

Source

KLIA will soon speed up immigration clearance to under five seconds with the introduction of 40 new autogates equipped with QR code technology, reducing the current clearance time of 10 to 15 seconds. The enhanced autogates, set to be installed at Terminals 1 and 2, are expected to ease congestion at Malaysia's busiest airport. The procurement process for these additional units will be completed within three weeks. This initiative, part of Malaysia's preparations for its ASEAN chairmanship next year, was announced by Home Minister Saifuddin Nasution Ismail and follows discussions with Malaysia Airports Holdings Berhad (MAHB).

Source

Prime Minister Anwar Ibrahim assured Malaysians that the government will not tolerate sharp increases in insurance premiums, as Bank Negara Malaysia works on an interim measure to control next year's premium hikes. The planned increase, reportedly between 40% and 70%, is driven by rising healthcare costs, including a 12.6% medical cost inflation in 2023. Anwar also hinted at measures to address high medical and treatment costs, citing a supply monopoly and plans to terminate contracts with certain companies to procure cheaper generic medicines from various countries.

Source

Salaries in Malaysia are expected to increase by 5% in 2025, with 24% of companies planning to expand their workforce, according to Mercer’s Total Remuneration Survey. Industries like energy and shared services are leading in salary growth, and roles in cloud computing, cybersecurity, and engineering are seeing higher demand and pay. Despite a competitive talent market, 70% of companies plan to adjust their compensation strategies, focusing on flexible, employee-centric approaches. The survey involved over 680 companies across various sectors.

Source

The International Monetary Fund (IMF) has praised Malaysia’s economic reforms, including the introduction of the Public Finance and Fiscal Responsibility Act and subsidy reforms, highlighting their importance for creating a more inclusive and resilient economy. While noting Malaysia's strong economic performance in 2024, the IMF projected a slight moderation in growth to 4.7% in 2025 due to reduced investment growth and global uncertainties. The IMF emphasised the need for continued reform efforts under the Madani economic framework to maintain momentum, while acknowledging potential upside risks from faster implementation of large investment projects.

Source

Malaysia's unemployment rate remained stable at 3.2% in October, with a slight decrease in the number of unemployed individuals to 551,400. The labour force grew by 0.1%, reaching 17.27 million, while the number of employed individuals increased to 16.72 million. Employment growth was observed across various sectors, including services, manufacturing, and agriculture. Youth unemployment slightly decreased to 10.4%.

Source

Fitch Ratings has affirmed Malaysia’s sovereign credit rating at BBB+ with a stable outlook, highlighting the nation’s economic progress under the Madani economy framework. Prime Minister Anwar Ibrahim attributed this positive rating to the government's legislative and institutional reforms, which have improved policy clarity and economic management. These reforms, including the Public Finance and Fiscal Responsibility Act 2023 and strengthened governance of state-owned enterprises, have contributed to political stability and policy certainty, aligning with the International Monetary Fund’s views on the government’s efforts to enhance productivity and inclusive growth.

Source

Malaysia launched a national artificial intelligence office to shape policies and address regulatory issues as part of its efforts to become a regional AI hub. The office will focus on strategic planning, research, and regulatory oversight, with key goals including developing an AI code of ethics, a regulatory framework, and a five-year action plan. The government also announced partnerships with major tech firms like Amazon, Google, and Microsoft, which have invested in AI, cloud, and data centre projects in the country. These digital ventures have contributed to Malaysia's economy, with RM71.1 billion in approved investments in the ICT sector in 2024.

Source

Malaysian automaker Proton unveiled the country's first locally produced electric vehicle (EV), the e.MAS 7 SUV, at the Malaysia International Trade and Exhibition Centre in Kuala Lumpur. Priced between RM105,800 and RM123,800, the e.MAS 7 marks a significant step in Malaysia's push to increase EV adoption, with plans for EVs to make up 20% of new vehicle sales by 2030. Backed by Chinese giant Geely, which owns 49.9% of Proton, the launch follows a USD10 billion investment in Proton’s plant. Analysts believe the e.MAS 7's affordable pricing could help accelerate the government's electrification goals.

Source

Malaysia's housing market remained resilient and stable in 2024, supported by strong demand and new projects, reflecting investor confidence. The average home price rose slightly by 0.4% to RM475,126, and residential transactions accounted for a significant portion of the market. Developers maintained a steady pace of new developments and home deliveries, with a 50% increase in new projects in the third quarter. The property market saw modest growth in both transaction volume and value, bolstered by ongoing infrastructure projects like the Rapid Transit Link and East Coast Rail Link.

Source

The Malaysian Investment Development Authority (MIDA) has partnered with DRB-Hicom Bhd and Zhejiang Geely Holding Group to develop the Automotive Hi-Tech Valley (AHTV) in Tanjung Malim, Perak, aiming to position Malaysia as ASEAN's hub for next-generation and energy-efficient vehicles. The collaboration focuses on transforming Malaysia’s automotive industry, enhancing local supplier capabilities, and attracting global automotive players to create a comprehensive ecosystem. The initiative aligns with Malaysia’s National Automotive Policy and New Industrial Master Plan 2030, promoting sustainable automotive innovation and supporting the region's electric vehicle revolution.

Source