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Jobless rate to drop further as govt initiatives, FDI seen boosting M’sian market in 2024 — economists

Jobless rate to drop further as govt initiatives, FDI seen boosting M’sian market in 2024 — economists

13 Feb 2024

Economists anticipate Malaysia’s unemployment rate to continue its downward trend and reach an average of 3.2% in 2024, and expect the labour force to grow by 2.1% and the number of employed persons to increase by 2.2% in the same period.  

In a note on Monday, TA Securities said the combined effects of government initiatives and the influx of foreign direct investment (FDI) are poised to contribute to a more robust job market, creating favourable conditions for lower unemployment rates and improved overall labour market conditions.

The research house noted that the government is proactively addressing issues such as low pay, such as the wage progressive model, to enhance the overall well-being of workers.  

“Furthermore, as we anticipate a resurgence in the Chinese market and a continuous uptick in domestic demand in Malaysia, the unemployment rate is expected to benefit positively,” TA Securities said.  

 “The sustaining economic growth is likely to attract increased FDI into the country. The inflow of FDI is anticipated to stimulate business expansion, leading to additional job opportunities,” it added.  

Separately, Hong Leong Investment Bank (HLIB) also noted that the future labour market will remain supported by a further increase in tourism activities, the realisation of FDI projects, and the government’s other job creation initiatives.  

To note, Malaysia’s jobless rate stood at 3.4% in 2023, showing an improvement from the 3.8% recorded in 2022 and the 4.6% rate observed in 2021, according to the Department of Statistics Malaysia.

The employment rose by an average of 2% year-on-year (y-o-y), while unemployment decreased by 8.1% y-o-y in 2023.

“Malaysia’s positive economic momentum that persisted throughout 2023 had increased the need for labour. 

“As a consequence, the number of employed persons steadily improved to keep up with industry demands, and the unemployment rate returned to pre-pandemic levels in November,” HLIB said. 

Source: The Edge Malaysia