KUCHING: The Employees Provident Fund’s (EPF) 6.30 per cent dividend rate for 2024 signals Malaysia’s economic strength.
Universiti Malaysia Sarawak’s (UNIMAS) Faculty of Economics and Business senior lecturer Farhana Ismail noted that from the 2010s to 2024, EPF dividends have demonstrated a recovery trend, stabilising between 5.20 per cent and 6.90 per cent.
The latest dividend rate marks a significant increase from 5.50 per cent in 2023, she said, reflecting improved economic conditions.
Citing the information from Department of Statistics Malaysia (DOSM), she pointed out that Malaysia’s economic growth accelerated to 5.1 per cent in 2024, up from 3.6 per cent in 2023.
“This substantial GDP expansion, coupled with higher total investments, sustained domestic demand, and a rebound in exports, underscores the nation’s strong economic fundamentals and ability to attract both domestic and foreign investors,” she told Sarawak Tribune.
She added that stable monetary policies have further reinforced confidence in Malaysia’s economic stability and growth prospects.
Farhana also pointed out that EPF’s dividend trends closely mirror the country’s economic cycles, with the latest rates indicating resilience and a positive outlook for Malaysia’s financial and investment landscape.
On Shariah-compliant savings, she highlighted a milestone in 2024, where the Shariah Savings rate matched the Conventional Savings rate at 6.30 per cent.
“This signals strong performance in Shariah-compliant investments and should serve as motivation for Muslim contributors who are still saving in the Conventional account to consider switching to Shariah Savings.
“Moreover, opting for Shariah Savings allows Muslim contributors to ensure their funds are managed in accordance with Islamic principles, free from elements of riba (interest), maysir (gambling), and gharar (uncertainty in contracts), which are often present in conventional banking and insurance investments,” she said.
Commenting on the sustainability of EPF’s dividend rates in the coming years, she said it would depend on key factors such as Malaysia’s economic growth, global economic conditions, EPF’s investment strategy, and government policies.
“If the domestic economy remains stable and global market conditions remain favourable, maintaining similar dividend rates is possible.
“However, as with any investment, risks exist. A global recession, market corrections, or weaker investment returns could put pressure on EPF to lower dividends,” she said.
She stressed that in the long run, the sustainability of EPF’s dividend rates will largely depend on macroeconomic stability, effective investment strategies, and evolving global market trends.
Farhana said that the macroeconomic impact of the RM73.24 billion EPF dividend payout would inject substantial liquidity into the economy and boost disposable income.
“Contributors may increase their spending in sectors eligible under the EPF Sejahtera Account (Account 2), such as healthcare, education, and housing-related expenses.
“Additionally, the increase in disposable income through the Flexible Account (Account 3) will support businesses and further boost domestic demand, driving economic activity,” she said.
Furthermore, she pointed out that beyond consumer spending, the dividend payout would also impact investments, as a portion of the dividends may be reinvested into equities, unit trusts, or other financial instruments, supporting capital market liquidity.
“Some recipients may also channel their funds into property investments, stimulating demand in the housing market.
“Additionally, if a portion of the funds is allocated to education or upskilling, it could drive long-term productivity gains, strengthening Malaysia’s human capital and fostering greater innovation,” she said.
Nevertheless, she stated that the rise in both consumption and investment is expected to drive overall GDP growth, further strengthening Malaysia’s economic outlook.
“Overall, the EPF dividend payout will stimulate consumer spending, enhance investment flows, and drive economic expansion.
“However, the actual impact depends on how recipients utilise their funds; nevertheless, the broader effect is likely to be beneficial for Malaysia’s economy,” she said.
