PETALING JAYA: Malaysia’s economy is expected to maintain its strong growth into the second half of 2024 (2H24), with a chance of exceeding projections despite potential global headwinds, say experts.
The resilience shown in 1H24, particularly the 5.9% growth in the second quarter, suggests the momentum to carry forward, albeit at a more moderate pace.
Sunway University economics professor Dr Yeah Kim Leng said while quarter-on-quarter growth in gross domestic product (GDP) may moderate in 2H24 due to rising headwinds, it is not indicative of a sharp slowdown.
“We might see some easing in growth from the high levels observed in the first two quarters, but it’s more of a gradual moderation,” he said, adding that growth for the year is likely to be at the higher end of the 4% to 5% range with a strong possibility of exceeding the 5% mark if global economic conditions hold steady.
Addressing inflation, which has edged higher, Prof Yeah said the current inflation rate is still below the trend level.
“Although price pressures are rising, particularly on food and beverages, the gradual increase isn’t severely impacting consumer spending yet,” he said.
He emphasised the need for targeted measures to cushion the impact on lower-income groups, who are more vulnerable to rising costs.
Prof Yeah also said the strengthening of the ringgit could ease food price pressures.
“With the improving health of the economy, the government is in a better position to increase spending, particularly in social programmes aimed at mitigating the rising cost of living,” he added.
Similarly, economist Geoffrey Williams has a positive outlook on the economy, attributing the growth to robust private sector activity.
“The general data is clearly positive across sectors, especially construction and services, driven by stronger private consumption and investment,” he said.
He said private sector-led growth demonstrates how reduced government interference can create space for the private sector to thrive.
Williams added that despite global challenges potentially affecting exports, domestic factors such as the Employees Provident Fund Account 3 (Flexible Account) withdrawals will continue to support domestic growth.
“With stable interest rates and a stronger ringgit, the economy is well positioned for the rest of the year,” he said.
Separately, Prime Minister Datuk Seri Anwar Ibrahim, also the Finance Minister, said Malaysia’s rousing economic performance is proof that the government’s policy reforms and economic management are bearing results.
“With these encouraging results, it further motivates us. We are confident that our growth momentum will be further strengthened.
“Budget 2025, to be tabled on Oct 18, will continue the policy execution that began in earnest this year,” he said in a statement yesterday.
