KUALA LUMPUR: The uptrend in the semiconductor industry and the rollout of various construction projects in the second half (2H) of 2024 are expected to continue supporting Malaysia’s economic growth, said MIDF Amanah Investment Bank Bhd.
In a research note, MIDF also anticipated the export recovery to continue in 2H 2024, driven by foreign demand for both electrical and electronics (E&E) and non-E&E products.
“Export growth accelerated to 12.3% year-on-year (y-o-y) in July 2024, marking the fastest growth in more than 1.5 years, driven by stronger domestic exports (18% y-o-y), supported by higher shipments of palm oil and palm oil products, as well as rebounds in exports of E&E and petroleum products.
“By destination, exports grew faster to major destinations except China and Hong Kong,” it said today.
MIDF said Malaysia’s gross domestic product (GDP) growth accelerated to 5.9% y-o-y in the second quarter (Q2) of 2024, marking the fastest expansion in six quarters, compared to Q1 2024 of 4.2% y-o-y.
It noted that the great GDP performance also surpassed the advance estimate of 5.8% y-o-y.
“For 1H 2024, the economy expanded 5.1% y-o-y, stronger than the 3.0% y-o-y in 2H 2023.
“The robust performance was driven by sustained resilience in domestic demand, improvements in manufacturing activities, and recovery in external trade,” it said.
Therefore, MIDF predicted that Malaysia’s economic growth to grow stronger at 5.0% this year, given the robust growth in Q2 2024.
“Despite the more optimistic view on the domestic economic picture, we will keep a close look at several factors which could derail the growth outlook, such as weaker growth in China, recession risk in the US, the recent escalation in geopolitical tensions, and potential disruptions to the global supply chain and trade flow.
“Although inflation has been generally under control, the potential uptrend in price pressures from planned policy changes could hurt consumer sentiment and their discretionary spending,” it said.
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