Its chief economist Hoe Ee Khor said this was due to the slower-than-expected recovery in the export sector compared to some countries.
“But it is still a strong growth,” he said during Amro’s latest quarterly update on the Asean+3 Regional Economic Outlook (AREO) that was held virtually today.
In addition, Hoe stated that Amro has raised Malaysia’s 2025 gross domestic product (GDP) growth forecast to 4.9%.
He said this is an increase from the previous 4.7%, on the back of an expected strong rebound in exports, resilient domestic demand, and investments.
“The export recovery is a bit slow this year but will be stronger next year.
“Investments that have come in the past few years will be implemented this year and in 2025, which will help support Malaysia’s economy,” he added.
Commenting on the ringgit, Hoe said the currency has been performing well since February as the country’s economy has done well.
“The government has taken some measures to encourage government-linked companies and government-linked investment companies to utilise their investment earnings, to help support the foreign exchange market.
“The economy is also benefiting from the turnaround in the external headwind, which also helps to support the balance of payment at the same time,” he added.
Hoe said significant headwinds had affected the economy last year, resulting in a somewhat depreciated ringgit and many other regional currencies remaining weak.
“However, there has been a turnaround in external demand due to measures taken by the authorities,” he said, adding that Amro has anticipated the ringgit to be somewhat stronger than last year.
As for the regional currencies, he noted that much currently hinges on the US Federal Reserve’s (Fed) policy.
“Currently, the market expects that the US interest rate will be cut by 50 basis points, while the Fed’s stance suggests only one rate cut.
“If inflation and interest rates remain higher than anticipated, regional currencies may weaken somewhat,” he added.
Conversely, he said if the Fed does proceed with a 50-basis points rate cut, it is believed that this would weaken the US dollar and strengthen regional currencies.