In a statement, MIDF Amanah Investment Bank Bhd, a unit of MIDF Research, said domestic spending remained robust and domestic demand in Malaysia continues to be the key driver of growth momentum in Q2 2024.

It said consumer spending continued to increase, as indicated by the more robust rise in retail trade, which grew 7.4% y-o-y in Q2 2024 compared to 5.2% in Q1 2024, marking the fastest expansion in four quarters.

“Other factors that will push GDP growth above 6% growth y-o-y was the encouraging progress in construction works and stronger output in the manufacturing and mining sectors.

“Export recovery also contributed to the Q2 2024 GDP growth, but we do not expect any big boost from net exports in view of more robust growth in imports,” it said.

MIDF opined that the growth momentum will continue in the second half of 2024, backed by the growing domestic economic activities and recovering exports.

“Nevertheless, we are wary of several downside risks to Malaysia’s growth outlook, which could come from possible re-acceleration in inflation and uncertainties from the external front, such as weaker growth in China and the US and further escalation in geopolitical conflicts,” it added.