In a note today, the research firm stated that the unemployment rate has remained consistent in recent months, attributed to the growth in job opportunities and a record labour participation rate.

These positive trends can be attributed to a more robust domestic demand and the ongoing revival of the services sector, which is further boosted by a rise in tourist visits.

“Moving forward, we believe the labour market will remain supported by an increase in investment spending and various policy support to raise basic wages for the lower income group under the Madani economy, as well as the expectation of higher allocation under Budget 2024,” it said.

Against this backdrop, Kenanga IB has kept its second quarter of 2023 (Q2 2023) gross domestic product (GDP) growth forecast at 6%, backed by domestic demand and expansion in the services sector.

“Nevertheless, we project growth to moderate by 3.6% in the second half of 2023, with the 2023 GDP growth forecast at 4.7%,” it said.

Meanwhile, Hong Leong Investment Bank Bhd (HLIB) anticipates a further enhancement in the labour market conditions due to the continuous growth momentum within the domestic economy. However, this improvement is expected to occur at a more measured rate.

The uptick in tourist arrivals is also expected to boost the recovery in tourism industries, consequently increasing employment opportunities, particularly in the services sector.

“Nevertheless, the hiring pace might slow down in the coming months in tandem with the slowing global economy,” it said.

According to the statistics department, the country’s unemployment rate declined by 0.1 percentage point to 3.4% in June 2023 from 3.5% recorded in May, as the number of unemployed persons fell to 581,700 from 584,600 persons previously.