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Malaysia’s GDP to grow above 5% in 2024

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Analysts say Malaysia’s labour market is anticipated to remain stable throughout the year.

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CIMB Research has maintained Malaysia’s GDP forecast at 5.2% for the year, driven by expectations of a recovery in external demand due to the global tech upcycle.

PETALING JAYA:
Two investment banks have kept their projections for Malaysia’s economic growth above 5% for 2024, attributing this to a supportive domestic economic environment and a recovery in external demand.

Hong Leong Investment Bank Bhd (HLIB) has maintained its forecast for gross domestic product (GDP) growth at 5% in 2024.

It said the forecast is supported by a healthier labour market and domestic policies expected to continue bolstering consumer spending.

HLIB said Malaysia’s labour market is anticipated to remain stable throughout the year, driven by increased tourism activities, expanded exports, and job-related initiatives under various national master plans.

In July, Malaysia’s labour market continued to improve, buoyed by positive economic growth and better export performance.

“The decline in the number of unemployed persons accelerated on a month-on-month basis (-0.3%; June: -0.1%) but slightly moderated on a year-on-year basis (-2.7%; June: -2.8%).

“The unemployment rate remained steady at 3.3% (June: 3.3%),” HLIB said in a research note.

The labour force expanded steadily, with month-on-month growth of 0.1% and year-on-year growth of 1.7%, reflecting continued confidence in the job market and overall economy.

Consequently, the labour force participation rate remained stable at 70.4%.

Meanwhile, CIMB Research has maintained its GDP forecast at 5.2% for the year, driven by expectations of a recovery in external demand due to the global tech upcycle.

This forecast also reflects strong domestic spending, supported by robust investments and resilient consumer spending in the latter half of 2024.

CIMB noted that July’s distributive trade volume growth of 5.5% year-on-year, up from 4.9% in the second quarter of 2024, indicates a positive outlook for service activities in the early third quarter of 2024.

“The increase in tourist arrivals and receipts for the first half of 2024 (H1 2024) is +28.9% (+50.8% year-on-year), along with buoyant motor vehicle sales (H1 2024: 7.2%), will likely support the overall services sector in the second half of 2024, underpinning our 2024 services sector estimate of 5.5%,” added CIMB Research.

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