Bernama – Malaysia’s growth momentum expected to exceed 5% in second quarter of 2024

KUALA LUMPUR, May 17 (Bernama) — RHB Investment Bank Bhd (RHB IB) expects Malaysia’s economic growth to accelerate by more than 5% year-on-year in the second quarter of 2024 (2QFY24) and is likely to continue in the next quarter as well.

In a note released today, RHB IB said its Composite Index or LEI model and Autoregressive (AR) model have accurately forecast gross domestic product (GDP) and growth momentum beyond 2023, enabling investors to pre-emptively reallocate their portfolios to optimize returns.

“While the RHB-LEI suggests that Malaysia’s economic growth momentum will pick up soon at 4.5% in the first quarter of 2024, our AR model projects Malaysia’s GDP growth at 4.4% in the first quarter of 2024.

“Overall, we maintain Malaysia’s GDP growth outlook at 4.6 per cent in 2024, supported by positive external and domestic factors,” RHB IB said.

He said the LEI model enhances the rigor and accuracy of the AR approach, suggesting Malaysia’s economy will be in a better position in 2024.

RHB IB believes the Malaysian economy will be supported by strong domestic spending patterns and improving tourism activity, driven by three factors.

The catalyst is, first and foremost, the country’s labour market, which remains tight with unemployment returning to pre-pandemic levels on the back of healthy job creation rates.

Second, with an optimistic global growth outlook, Malaysia’s export momentum is expected to recover in the first half of 2024, and third, relatively benign inflationary pressures are currently observed.

It noted that while the Consumer Price Index (CPI) recorded 1.5% year-on-year in December, consumer prices are expected to rise from 2.5% in 2023 to 3.3% in 2024.

— Bernama


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