Domestic demand in Malaysia remains the key driver underpinning stronger growth momentum in 2QCY24. Consumer spending continued to increase as shown by the more robust rise in retail trade at +7.4%yoy in 2QCY24 (1QCY24: +5.2%yoy), the fastest expansion in 4 quarters. In addition, spending on motor vehicle also grew faster at +10.2%yoy (1QCY24: +8.2%yoy). With more people being employed and unemployment rate staying at low levels, we believe the positive income growth and the growing size of income earners will support domestic consumption to remain on expansionary trend. Increased tourist arrivals, cash assistance from the government and ability to tap EPF Account 3 also contributed to the growing
consumption expenditures.
MIDf said it estimates full-quarter GDP growth at +6.1%yoy for 2QCY24. Taking into accounting the recent indicators and sectoral updates, the house estimates the full-quarter GDP growth for 2QCY24 will be around +6.1%yoy. MIDF said it noticed more encouraging domestic spending as shown by the robust growth in the services sector. Other factors that will push GDP growth above +6%yoy was the encouraging progress in construction works and stronger output in the manufacturing and mining sectors.
Export recovery also contributed to the 2QCY24 GDP growth, but the house said it does not expect any big boost from net exports in view of more robust growth in imports. In general, it opines the growth momentum will continue in 2HCY24, backed by the growing domestic economic activities and recovering exports.
MIDF said it is 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.Stronger production in line with the external trade recovery.
Malaysia’s industrial production rose by +4.5%yoy in 2QCY24, the fastest quarterly growth since 3QCY22. This was underpinned mainly by the growth in manufacturing output (+4.9%yoy; 1QCY24: +2.1%yoy)
MIDF estimates full-quarter GDP growth at +6.1%yoy for 2QCY24. Taking into account the recent indicators and sectoral updates, it estimates the full-quarter GDP growth for 2QCY24 will be around +6.1%yoy noticing a more encouraging domestic spending as shown by the robust growth in the services sector.
