KUALA LUMPUR: Malaysia recorded a strong growth in gross domestic product (GDP) at 4.2 per cent in the first quarter (Q1) of this year due to sustained domestic demand and better export performance, said the Finance Ministry.
In a written parliamentary reply, the ministry said the strong growth was achieved despite challenging external conditions.
The ministry also said Malaysia's GDP growth in Q1 this year has also outperformed countries such as Singapore (2.7 per cent), Thailand (1.5 per cent) and the United Kingdom (0.2 per cent).
"This encouraging performance is also reflected in economic and financial indicators, including the labour market which shows positive growth momentum with the unemployment rate in Q1 remaining low at 3.3 per cent compared to 3.5 per cent in the same period last year.
"Simultaneously, the Leading Index has also continued to record positive growth for four consecutive months, with an increase of 2.3 per cent in March 2024," the ministry said in response to Mohd Syahir Che Sulaiman (PN-Bachok) who enquired on detailed projections for the GDP growth rate for the 2024 and 2025.
Meanwhile, domestic tourism recorded an increase of 19 per cent to 58.6 million visitors in Q1.
The inflation rate in Q1 also remained low at 1.7 per cent, compared to 3.6 per cent in the same quarter of 2023.
The ministry also said Malaysia's stock market capitalisation reached a new high, exceeding RM2 trillion for the first time on May 7, and has reached RM2.059 trillion as of June 12.
Following this, the ministry said the government is confident that the country's GDP will achieve a growth of between four and five per cent this year.
"Additionally, the Global Economic Prospects report by the World Bank published on June 11 stated that Malaysia's economic growth is projected to increase to 4.4 per cent in 2025 compared to 4.3 per cent in 2024.
"This growth outlook aligns with the World Bank's global economic growth projection, which is expected to rise to 2.7 per cent in 2025 compared to 2.6 per cent in 2024."
In May, Bank Negara Malaysia governor Datuk Abdul Rasheed Ghafour had said Malaysia's economy grew faster than expected at 4.2 per cent in Q1 supported by higher household spending.
He had said private consumption grew by 4.7 per cent in the quarter buoyed by discretionary and necessities spending.
Other factors that acted as catalysts to growth were a turnaround in goods exports and higher tourist arrivals, improvement in labour market conditions and stronger investment activities.