In its global market research note, the banking group’s senior Asean economist Lavanya Venkateswaran, forecasted Malaysia’s GDP growth to remain strong in the second half of 2024 (H2 2024), averaging 4.9% y-o-y versus 5.1% in the first half of 2024 (H1 2024).

She said this is supported by the bottoming out of the global electronics downcycle, higher investment spending underscoring progress on the government’s medium-term economic development plans, and resilient household spending.

“This will be at the upper bound of the official 4%-5% GDP growth target range for 2024.

“For 2025, we continue to expect the economy to grow by 4.5% y-o-y,” she said.

Meanwhile, for 2024, Lavanya said Malaysia’s current account surplus is expected to widen to 2.5% of GDP from 1.5% in 2023.

On Aug 16, it was reported that Malaysia’s economy saw a robust expansion of 5.9% in Q2 2024, bolstered by resilient household spending, vigorous investment activities and a significant boost in tourism arrivals, which exceeded the earlier prediction of 5.8%.

Bank Negara Malaysia (BNM) governor Abdul Rasheed Ghaffour said the central bank views Malaysia’s growth as on track to end the year near the upper end of the 4%-5% forecast range.

“The 5.9% GDP growth in Q2 of 2024 is the highest since Q4 in 2022,” he said.

According to Lavanya, the solid growth outlook and well-contained inflation pressures, albeit trending higher in H2 2024, will give BNM room to keep the policy rate unchanged for the rest of this year.

“Moreover, the measures undertaken by the authorities since late February are bearing fruit, and the ringgit has outperformed regional peers.

“BNM also noted that the daily average foreign exchange trading volume was higher (US$18 billion or RM78.78 billion) compared to prior to the measures (Jan 2 – Feb 23, 2024: US$15 billion or RM65.67 billion),” she added.