MALAYSIAN ECONOMY POISED FOR MODERATE GROWTH Amidst a challenging environment, Malaysia’s GDP growth in 2023 slowed to 3.7%2 from the robust 8.7% recorded in 2022 during the post-Covid economic recovery phase. This deceleration was primarily attributed to factors such as sluggish global trade, geopolitical tensions, tighter monetary policies, and the global downturn in the technology sector, directly impacting SilTerra’s sales performance. However, improving labour market conditions provided some support to growth throughout the period. Looking ahead to 2024, Malaysia’s economy is expected to be underpinned by resilient domestic expenditure, an upturn in external demand, and a recovery in the technology sector. However, growth is projected to hover between 3.3% and 4.3% during 20243, showing only marginal improvement compared to 2023. By closely monitoring our operating environment, we acquire a deeper understanding of external factors that could affect our operations or financial performance. This enables us to adapt our strategies and approaches across all business segments, enhancing our sustainability and ensuring we remain well-positioned for long-term value creation. GLOBAL ECONOMY REMAINS UNCERTAIN Ongoing tensions in the Middle East, alongside the persistent Russia-Ukraine conflict, continue to disrupt global energy supply chains and contribute to volatility in energy and raw material prices. These factors, combined with inflationary pressures, have subdued economic growth, with global growth slowing from 3.0% in 2022 to 2.6% in 2023, and a further decrease to 2.4% anticipated in 20241. The impact of this deceleration is more pronounced in advanced economies, whereas emerging and developing market economies are expected to grow over three times faster in 2024 compared to their advanced counterparts. Despite the challenges posed by a sluggish global economy, our proactive approach to diversifying our product portfolio and expanding our geographical presence will serve to reduce our exposure to market risks. Global GDP Growth Rate (%) 2.4 2.6 3.0 1.2 1.5 2.5 3.9 4.0 (%) (%) (%) 3.7 Global Advanced Economies 2022 2023 2024 2022 2023 2024 Emerging Market and Developing Economies 2022 2023 2024 Malaysia GDP Growth Rate 5.6% 2.9% 3% 3.3% 3.9% 3.5% 3.3% 4.3 Q1-2023 Q2-2023 Q3-2023 Q4-2023 Q1-2024 Q2-2024 Q3-2024 Q4-2024 Management Discussion and Analysis – Strategic Review DAGANG NeXCHANGE BERHAD 56 OPERATING ENVIRONMENT
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