Jakarta:Malaysia's economy is projected to expand by 4.2-5.2 percent in 2027, a slight decrease from the 4.8-5.3 percent growth expected this year. This growth is supported by sustained domestic demand, favorable labor market conditions, continued income growth, and firm investment activity, as outlined by the Ministry of Finance (MoF).

According to BERNAMA News Agency, the MoF emphasized the importance of investment in enhancing domestic capabilities, creating high-paying jobs, and improving living standards. Private consumption is expected to remain a key growth driver, supported by household purchasing power and expansion in sectors such as tourism, retail, and transportation during the Visit Malaysia 2026-2027 initiative.

Investment activity is anticipated to stay robust due to strategic initiatives under plans like the 13th Malaysia Plan, New Industrial Master Plan 2030, National Semiconductor Strategy, and National Energy Transition Roadmap. Private investment is expected to grow by 7.1 percent, with public investment increasing by 6.8 percent in 2027.

The federal government's expenditure for Budget 2027 is estimated at RM459.8 billion, with 81.9 percent allocated for operating expenditure. This budget aims to focus on rakyat-centric projects, particularly in education, health, and defense.

Malaysia's services sector is projected to grow by 5.2 percent in 2027, driven by digital services and private consumption. The manufacturing sector is expected to grow by 4.1 percent, with the agriculture sector rebounding by 0.5 percent. The construction sector is forecasted to grow by 5.7 percent.

On the external front, gross exports are forecasted to rise by 3.0 percent, with an increase in demand for manufactured, mining, and agriculture goods. Imports are estimated to grow by 3.5 percent, driven by higher imports of intermediate, capital, and consumption goods.

Inflation is projected to range between 1.8 and 2.8 percent in 2027, with risks including geopolitical tensions and supply chain disruptions. The labor market is expected to remain strong, with employment projected to expand by 2.0 percent to 17.2 million persons.

On the global stage, GDP growth is expected to be moderate, influenced by advancements in AI and continuing geopolitical conflicts. Malaysia aims to sustain its growth by diversifying export markets and strengthening regional integration.