A year ago when Prime Minister Datuk Seri Anwar Ibrahim, as Finance Minister, presented Budget 2024, the projection for growth rate was at 4-5%. As Malaysia grew rapidly in the first half of 2024, the World Bank revised up its forecast from 4.3% to 4.9%, a significant 0.6% increase. The Ministry of Finance now projects the growth rate at between 4.8 and 5.3% in 2024, and 4.5 to 5.5% in 2025.
Why is this growth rate important?
It reflects the health of our economy and its ability to create jobs and generate income for Malaysians. Many ratios measuring the health of the economy, including the debt ratio, is also based upon the size of the overall GDP.
But we also acknowledge that the wellbeing of the people is not solely measured through GDP, which is why PM Anwar stressed upon “raising the ceiling” (growth) and “raising the floor” (distribution) at once.
When the Prime Minister launched the Madani Economy Framework, he stated the aspiration to grow at 6% per annum over the course of the next decade.
In Second Takeoff (page 121-126), I spoke about the need for all to embrace the narrative of pushing for exponential growth as long as the growth comes from sustainable sources and not overheating the economy unnecessarily.
As the discourse on public debt is actually premised upon the ratio of debt to GDP, instead of focusing on debt, the national attention, as I wrote in Second Takeoff should be focused on “doubling down on the denominator, that is by accelerating GDP growth” (page 123).
#Budget2025
#SecondTakeoff
Liew Chin Tong
Deputy Minister of International Trade and Industry
