{
  "title": "IMF Staff Completes the 2025 Article IV Mission to Malaysia",
  "publication": "IMF News, December 13, 2024",
  "sourceUrl": "https://www.imf.org/en/news/articles/2024/12/13/pr-24468-malaysia-imf-staff-completes-the-2025-article-iv-mission",
  "canonical": "https://www.imf.org/en/news/articles/2024/12/13/pr-24468-malaysia-imf-staff-completes-the-2025-article-iv-mission",
  "overlayPath": "/en/news/articles/2024/12/13/pr-24468-malaysia-imf-staff-completes-the-2025-article-iv-mission/index.md",
  "summary": "An International Monetary Fund (IMF) team, led by Mr. Masahiro Nozaki, conducted discussions on the 2025 Article IV Consultation with the Malaysian authorities and other stakeholders during December 3-13, 2024",
  "publishDate": "2024-12-13",
  "sections": [
    {
      "heading": "Mission details",
      "content": "- An IMF team, led by Mr. Masahiro Nozaki, conducted discussions on the 2025 Article IV Consultation with the Malaysian authorities and other stakeholders during December 3-13, 2024.\n- End-of-mission statement reflects IMF staff’s preliminary findings; staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision."
    },
    {
      "heading": "Economic performance and growth outlook",
      "content": "- The Malaysian economy performed strongly in 2024, supported by strong domestic and external demand.\n- Growth projections:\n  - Growth is projected to moderate from 5.0 percent in 2024 to 4.7 percent in 2025.\n- Risks to growth:\n  - Tilted to the downside, mainly due to an uncertain global outlook, including external risks from deeper geoeconomic fragmentation.\n  - Upside risk from faster-than-envisaged implementation of large investment projects in Malaysia."
    },
    {
      "heading": "Inflation outlook",
      "content": "- Inflation developments:\n  - Inflation has been stable at about 2 percent (year-on-year) so far in 2024.\n  - Assuming the implementation of RON95 gasoline subsidy reforms in mid-2025 and tighter labor market conditions, average headline inflation is projected to rise from 2.0 percent in 2024 to 2.6 percent in 2025.\n- Risks to inflation:\n  - Tilted to the upside, including from global commodity price shocks and potential wage pressures from increases in minimum wage and civil servants’ pay."
    },
    {
      "heading": "Fiscal policy findings and recommendations",
      "content": "- Staff welcomes:\n  - The passage of the Public Finance and Fiscal Responsibility Act (FRA) in 2023.\n  - The authorities’ commitments to ongoing fiscal consolidation and retargeting of RON95 gasoline subsidies.\n  - Successful electricity and diesel subsidy reforms.\n- Recommendations:\n  - Continue fiscal consolidation to rebuild fiscal buffers and meet the medium-term deficit and debt targets under the FRA.\n  - Support consolidation with high-quality, durable revenue and expenditure measures.\n  - Continue revenue mobilization efforts toward a more broad-based and efficient tax system.\n  - Further subsidy reforms that build on the successful electricity and diesel subsidy reforms.\n  - Mitigate the subsequent impact of fiscal reforms on vulnerable households through well-targeted cash transfers."
    },
    {
      "heading": "Monetary policy and exchange rate",
      "content": "- Current stance:\n  - The current neutral monetary policy stance is appropriate.\n- Guidance:\n  - Monetary policy should remain data-dependent.\n  - Bank Negara Malaysia (BNM) should stand ready to tighten monetary policy if upside inflation risks materialize.\n  - Continuing to maintain exchange rate flexibility is essential."
    },
    {
      "heading": "Financial sector assessment",
      "content": "- Overall soundness:\n  - Malaysia’s financial sector remains sound.\n  - Banks’ capital and liquidity positions are robust.\n- Risks and vulnerabilities:\n  - Credit growth, corporate and household balance sheets, and real estate markets would not pose systemic risks at this juncture.\n  - Continued vigilance warranted against:\n    - Pockets of more highly leveraged borrowers.\n    - Interlinkages between banks and non-bank financial institutions.\n    - Climate and cyber risks.\n  - Spillover risks from these areas remain contained."
    },
    {
      "heading": "Structural reforms, social protection, and other priorities",
      "content": "- Structural reform agenda:\n  - The government’s structural reform plans under the Economy MADANI Framework are appropriately focused.\n  - Timely implementation of bold structural reforms is essential to enhance productivity and inclusive growth.\n- Social safety nets and digital initiatives:\n  - Strengthen social safety nets, including through developing the Pangkalan Data Utama (PADU) digital registry.\n  - The subsequent impact of fiscal reforms on vulnerable households should be mitigated with well-targeted cash transfers.\n- Climate and technology readiness:\n  - Further efforts warranted to facilitate Malaysia’s transition towards net-zero emissions and to enhance readiness for Artificial Intelligence.\n- Governance:\n  - Staff welcomes ongoing efforts to strengthen governance and the anti-corruption framework."
    },
    {
      "heading": "Closing remarks",
      "content": "- The IMF team thanked officials of the Government of Malaysia and Bank Negara Malaysia, other public institutions, and representatives from the private sector for productive discussions.\n- Staff view: Malaysia’s strong economic performance provides a window of opportunity to advance its ambitious reform agenda; there is a need to rebuild fiscal buffers, augment growth potential, and strengthen social protection while preserving macroeconomic and financial stability.\n\nIMF Communications Department press release, December 13, 2024.\n\n---\n\n\n References\n\n- Malaysia and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2024/12/13/pr-24468-malaysia-imf-staff-completes-the-2025-article-iv-mission"
    }
  ],
  "bullets": [
    "[Markdown version](/en/news/articles/2024/12/13/pr-24468-malaysia-imf-staff-completes-the-2025-article-iv-mission/index.md)",
    "[Structured JSON version](/en/news/articles/2024/12/13/pr-24468-malaysia-imf-staff-completes-the-2025-article-iv-mission/index.json)",
    "[Bundle manifest](/en/news/articles/2024/12/13/pr-24468-malaysia-imf-staff-completes-the-2025-article-iv-mission/bundle-manifest.json)",
    "Published: December 13, 2024",
    "An IMF team, led by Mr. Masahiro Nozaki, conducted discussions on the 2025 Article IV Consultation with the Malaysian authorities and other stakeholders during December 3-13, 2024.",
    "End-of-mission statement reflects IMF staff’s preliminary findings; staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.",
    "The Malaysian economy performed strongly in 2024, supported by strong domestic and external demand.",
    "Growth projections:",
    "Risks to growth:",
    "Inflation developments:",
    "Risks to inflation:",
    "Staff welcomes:",
    "Recommendations:",
    "Current stance:",
    "Guidance:",
    "Overall soundness:",
    "Risks and vulnerabilities:",
    "Structural reform agenda:",
    "Social safety nets and digital initiatives:",
    "Climate and technology readiness:",
    "Governance:",
    "The IMF team thanked officials of the Government of Malaysia and Bank Negara Malaysia, other public institutions, and representatives from the private sector for productive discussions.",
    "Staff view: Malaysia’s strong economic performance provides a window of opportunity to advance its ambitious reform agenda; there is a need to rebuild fiscal buffers, augment growth potential, and strengthen social protection while preserving macroeconomic and financial stability.",
    "[Malaysia and the IMF](http://www.imf.org/external/country/MYS/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
  "alternates": {
    "markdown": "/en/news/articles/2024/12/13/pr-24468-malaysia-imf-staff-completes-the-2025-article-iv-mission/index.md",
    "json": "/en/news/articles/2024/12/13/pr-24468-malaysia-imf-staff-completes-the-2025-article-iv-mission/index.json",
    "bundleManifest": "/en/news/articles/2024/12/13/pr-24468-malaysia-imf-staff-completes-the-2025-article-iv-mission/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-26T03:30:18.112Z"
}