KUALA LUMPUR, Aug 14 – Economists agree that Malaysia’s gross domestic product (GDP) for the second quarter of 2024 (2Q 2024) will expand by a phenomenal 5.8 per cent from 1Q 2024’s 4.2 per cent.
They said GDP growth will be bolstered by brisk industrial activities, higher crude palm oil prices, fewer unemployed people, and increased spending.
The economists also concur that the economy is well-positioned to expand by between 4.0 and 5.0 per cent for the whole of 2024, with an accounting body stating that global confidence in Malaysia has improved significantly as it has shown notable economic resilience.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said 2Q 2024’s GDP growth would be in line with the Department of Statistics Malaysia (DoSM) advance estimates of 5.8 per cent.
He told Bernama that the economy’s growth momentum would continue into 2Q 2024 beating 1Q 2024’s growth of 4.2 per cent markedly.
Mohd Afzanizam said the prevailing data points suggest Malaysia’s economy is expected to do well in June.
He highlighted that the country recorded higher growth in the volume index of services and the industrial production index, which rose by 6.7 per cent and 4.5 per cent, respectively, in 2Q 2024.
He added that crude palm oil production has increased by double-digits to 15.9 per cent from 3.4 per cent previously, indicating increased export income from the country’s top non-oil commodity earner.
Besides this, Mohd Afzanizam pointed out that the unemployment rate has remained at 3.3 per cent for three consecutive quarters, but the number of unemployed individuals has declined to 557,800 in 2Q 2024 from 561,100 in 1Q 2024.
“On that note, Malaysia’s employment markets may have reached full employment status, meaning there are plenty of jobs to be found and more people have jobs and have been receiving income.
“The introduction of flexible withdrawal accounts by the Employees Provident Fund, along with cash transfer programmes, will allow for a higher growth trajectory in the immediate terms.
“Hence, 2Q 2024’s GDP should be higher than the previous quarter,” he said.
Ozer Karagedikli, professor of practice and director of the Central Banking Research Centre at Asia School of Business, agreed with Mohd Afzanizam, saying GDP is estimated to expand by 5.8 per cent, fostering optimism over the nation’s economic strength.
Karagedikli said Malaysia’s economic potential is substantial, and a growth rate between 4.0 and 5.5 per cent can be achieved.
He said the range is wide and cautioned that the situation is complex because achieving consistent growth close to six per cent might be challenging.
“It is not so simple as achieving consistent growth rates close to 6.0 per cent year after year is possible but might prove challenging without significant reforms to enhance the economy’s productivity and competitiveness,” he said.
Meanwhile, the latest Global Economic Conditions Survey by the Association of Chartered Certified Accountants (ACCA) and Institute of Management Accountants found a slight improvement in global confidence among accountants and finance professionals in Malaysia’s economy, especially for 2Q 2024.
In a statement, the ACCA said that the Asia Pacific region, including Malaysia, has shown notable resilience, providing key insights into regional economic trends and risk priorities.
“Malaysia, as part of the Asia Pacific region, has mirrored these positive trends. The country’s manufacturing sector has seen a notable uptick, driven by increased global demand and advancements in technology,” it said.
The ACCA said the survey found that the Malaysian government’s recent initiatives to boost the digital economy and enhance infrastructure have further supported the growth.
