KUALA LUMPUR: MIDF Research expects Malaysia’s gross domestic product (GDP) growth rate to improve to 4.7 per cent in 2024, supported by the recovery in external trade and sustained growth in domestic demand.
Director and head of strategy Imran Yassin Md Yusof said positive job market conditions, income growth and continued recovery in the tourism sector would also support the domestic spending outlook.
"Moreover, stabilisation of monetary policy in major countries, a stronger recovery in China and supportive global commodity prices are expected to boost Malaysia’s external front in 2024,” he said at the "2024 Market Outlook Presentation: Cruising Along” here today.
He said the research firm is cautiously optimistic about the economic and equities market growth prospect for 2024, albeit at a steady pace, with many of the factors which influenced 2023, such as inflation and interest rates, seeming to have waned.
Imran also said commodity prices are expected to remain stable, with forecasts for both crude palm oil and Brent oil prices to average RM3,600 per tonne and US$84 per barrel (US$1=RM4.68), respectively, for next year.
"The domestic economy is expected to be anchored by continuous steady consumer spending, busier tourism-related activities, and construction of infrastructure projects.
"Malaysia’s job market remains in good shape as reflected by the continuous growth in employment, a decline in unemployment and lower jobless rate,” he said.
However, he stated that the inflation rate would likely hover above 3.0 per cent next year amid the roll-out of targeted fuel subsidies.
Real wage growth is anticipated to remain in positive territory even though the inflation rate is forecasted higher due to subsidy rationalisation efforts, he said.
In terms of the global economy, Imran said growth in 2024 would remain moderate, below the average of 3.8 per cent recorded during the 2010-2019 period, as constrained by several downside risks, including the policy tightening by central banks to tackle inflation and geopolitical risks.
"While global production activities could pick up, recovering from the lows this year, consumer spending will remain a key factor to support growth next year on the back of easing inflation, healthy labour market and rising income,” he pointed out.
For trading countries, he noted that growth prospects would be more encouraging in 2024, benefitting from the recovery in global production and trade activities but potentially limited by the expected slowdown in demand from the advanced economies.
"The factor of United States rate hikes will likely dissipate in 2024, and MIDF Research expects that the recovery of China’s economy will continue into 2024, supporting the recovery of Malaysia’s external trade,” he added. - Bernama
