BMI: Malaysia’s medical devices market to benefit from health spending in 2024
22 Jan 2024
BMI, a Fitch Solutions company, said Malaysia’s medical devices market will record high-single digit growth over the firm’s five-year forecast period, driven by factors including strong government support for medical devices and healthcare sectors, medical tourism and an ageing population.
In a commentary last Friday, the firm said Malaysia’s 2024 health budget will support medical devices market growth by focusing on the procurement of medical equipment, upgrading hospitals and clinics, and enhancing system capacity.
It said domestic medical device production will continue to rise as the government prioritises boosting production witihin key strategic sectors.
BMI projected that Malaysia’s medical devices market will expand at a 2023-2028 compound annual growth rate of 9.5% in local currency terms and 8.5% in US dollar terms, which will take the market to a value of US$4.5 billion (RM16.6 billion) in 2028.
It said key growth drivers include strong government support for the healthcare and medical device sectors, medical tourism, a rising elderly population and growing burden of chronic diseases.
“A downside risk to our outlook for the market is Malaysia’s export-oriented economy and ongoing political uncertainty.
“Malaysia’s export-oriented economy makes it vulnerable to economic slowdowns in key markets, including mainland China, the US and the European Union, which could hinder demand for Malaysia’s exports as well as its ability to import medical devices.
“Political uncertainty stems from the number of parties with differing ideologies that currently make up Malaysia’s unity government, which will challenge policymaking and potentially slow reforms,” said BMI.
2024 health budget
Meanwhile, the firm said the Ministry of Health (MOH) had been allocated RM41.2 billion for 2024, which is an increase of 12.6% from the RM36.3 billion allocated in 2023.
It said this is the largest increase among the ministries, and also marks the second successive year that the MOH received a double-digit increase, highlighting the government’s commitment to enhancing the healthcare system.
“In 2024, RM5.5 billion has been allocated for the procurement of medicines, consumables, reagents and vaccines.
“The government will also prioritise healthcare facilities, including allocations to build new hospitals, and modernising other hospitals and health clinics.
“These initiatives will support Malaysia’s medical devices market growth, improving access to services and ensuring solid demand for products,” it said.
BMI said in 2022, Malaysia’s medical devices exports increased by 16.3% in local currency terms to a value of RM18.5 billion, while exports expanded by 9.5% in US dollar terms to US$4.2 billion.
“Malaysia’s medical devices exports have recorded growth in local currency terms every year since 2012 with the exception of 2016 and 2020.
“US dollar growth has been more volatile due to a depreciating ringgit in certain years, although growth has been broadly consistent.
“Mostly consistent growth in exports over the previous decade highlights Malaysia’s growing domestic medical devices production base,” it said.