Kuala Lumpur: expects the country’s current account to remain resilient over the medium term, supported by robust manufacturing exports.
According to BERNAMA News Agency, Malaysia’s electrical and electronic (EandE) exports are set to benefit from the global technology cycle expansion, driven by the underlying demand for technology devices and applications. The continued improvement in global travel demand is also expected to boost the travel surplus, further supported by domestic policies leading up to the upcoming Visit Malaysia 2026, as stated in BNM’s Economic and Monetary Review 2024 released today.
The central bank highlighted Malaysia’s favourable position as a strategic location for new investments by companies seeking to diversify their operations amid the ongoing global trade reconfiguration. Gains from the domestic investment upcycle across a wide range of manufacturing and services activities could lift exports of goods and services in the medium term.
BNM noted, however, that challenges remain for Malaysia’s current account balance, particularly due to uncertainties surrounding global trade. Consequently, policy imperatives should focus on enhancing Malaysia’s exports and boosting the tourism sector to strengthen the current account surplus. In the services account, Malaysia should continue to enhance tourism offerings to cater to more diverse markets.
Moreover, the central bank emphasized the importance of enabling the growth and development of domestic capacity and expertise in digital services. Strategic expansions in the data centre industry can advance local manufacturers’ capabilities in manufacturing equipment such as cooling systems and server racks. This industry can also generate forward linkages by uplifting local independent software vendors and fostering the development of local cloud computing, enabling them to serve both domestic and international markets.
This development provides opportunities for Malaysia to create more services exports as new sources of income while reducing reliance on imported digital services. Malaysia has consistently maintained a current account surplus over the last two decades, primarily supported by continuous net exports of goods, offsetting deficits in the services and income accounts.
BNM pointed out that this consistent surplus distinguishes Malaysia from its regional peers and countries with similar credit ratings, many of which have experienced intermittent or prolonged current account deficits during the same period. The report highlighted a higher surplus in the current account balance, registering RM32.8 billion, or 1.7 per cent of gross domestic product (GDP), in 2024, supported by the continued surplus in the goods account and narrowing deficits in services and secondary income accounts, despite a wider deficit in the primary income account.