Malaysia is targeting economic growth of 4.5% to 5.5% this year, despite challenges posed by geopolitical tensions, trade restrictions, and slowing global markets.

Investment, Trade, and Industry (MITI) Minister Tengku Datuk Seri Zafrul Abdul Aziz acknowledged these external hurdles but expressed confidence in Malaysia’s economic resilience, highlighting robust trade and investment flows as major contributors to growth, The Malaysian Reserve reports.

“Last year, Malaysia recorded a GDP growth of around 3%, and our target for this year is at least 4.5% to 5.5%. Of course, there are challenges, but we are taking steps to ensure that our businesses have access to as many markets as possible,” he said at MITI’s 2024 report card and 2025 outlook briefing on Monday.

He highlighted the government’s adaptable approach to economic forecasting, stating that Malaysia would revise its projections if needed to reflect changes in global trade dynamics.

“Like the World Bank and International Monetary Fund, we will adjust our projections if necessary. Trade wars, tariffs, or other external factors will have an impact, but we will respond accordingly,” he stated.

To manage risks, Malaysia is enhancing trade ties with new economic blocs.

Tengku Zafrul pointed out that exports to South America and Africa have experienced double-digit growth, showcasing the success of the country’s diversification strategy in broadening market access and reducing reliance on traditional trade partners.

Moreover, in regard to the Malaysia-European Union (EU) Free Trade Agreement (FTA), Tengku Zafrul revealed that negotiations have resumed, with palm oil no longer being a major obstacle in the discussions.

“We have addressed the concerns and the fact that we have complied with the standards. But having said that, there are other areas that we need to look at before we can conclude the FTA,” he said.

The minister aims to conclude the Malaysia-EU FTA by 2026, ensuring a comprehensive agreement that includes provisions for the digital and green sectors, while benefiting Malaysian businesses.

Meanwhile, MITI reported that approved digital investments amounted to RM64.8 billion in Q3 2024, exceeding the total for 2023, which was RM60.5 billion.

“From 2021 to Q3 2024, approved digital investments reported by the Malaysian Investment Development Authority (MIDA) and Malaysia Digital Economy Corporation (MDEC) amounted to RM209.5 billion, creating 4,704 job opportunities,” he said.