Uptick: Abdul Rasheed (right) with chief statistician Datuk Mohd Uzir Mahidin after the release of the second quarter GDP results. — ONG SOON HIN/The Star
KUALA LUMPUR: Malaysia’s economy continues to show resilience as domestic demand rose, investment flowed through, and exports expanded in the second quarter of this year.
This resulted in the gross domestic product (GDP) growing by 5.9% in the three months to June 2024 compared with a growth of 4.2% in the first quarter of the year.
The second quarter GDP reading was also slightly higher than the 5.8% forecast in a Reuters poll and advance estimate released by the government last month.
Bank Negara, in announcing the economic performance yesterday, said household spending increased amid sustained positive labour market conditions and larger policy support.
The country’s investment activity was supported by the continued progress in multi-year projects and capacity expansion by firms.
Exports, meanwhile, improved amid higher external demand and positive spillovers from the global technology sector upcycle.
“For the full-year forecast, the economy is expected to expand closer to the upper end of the 4% to 5% range, but this is subject to risks from domestic and external factors.
“The downside risks could come from weaker than expected global growth, further escalation of geopolitical conflicts, and lower-than-expected commodity production,” Bank Negara Governor Datuk Seri Abdul Rasheed Ghaffour told a press conference yesterday.
“Growth could be higher due to greater spillovers from the global technology upcycle and more robust tourism activity.
“In addition, faster implementation of new and existing investment projects could also lead to more robust investment activity and overall growth in the economy.”
Abdul Rasheed said the ringgit remains on a recovery path and has been appreciating of late.
“Financial market participants are expecting imminent policy rate cuts by the US Federal Reserve.
“This has softened the US dollar on key currencies including the ringgit.
“The narrowing of interest rate differentials with the United States will be conducive to inflows, especially given Malaysia’s economic prospects,” he said.
For the year until Aug 13, the ringgit has appreciated by 3.1% against the US dollar.
“The coordinated actions between the government and Bank Negara, which have already facilitated better balance on flows, will continue to cushion pressures on the ringgit.
“In April, Bank Negara rolled out a pilot fast-track pre-approval framework known as the Qualified Resident Investor (QRI) programme to reduce friction for corporates to repatriate and convert their foreign currency funds,” he said.
He added that these actions, including the coordinated initiatives with government-linked companies and government-linked investment companies, continue to provide the needed support for the ringgit.
He said these efforts have also resulted in greater and more consistent flows into the foreign exchange market.
