KUALA LUMPUR, Aug 9 (Bernama) -- CIMB Investment Bank Bhd may revise its estimate for Malaysia’s second quarter of 2024 (2Q 2024) gross domestic product (GDP) growth higher to six per cent year-on-year (y-o-y) from the advance estimate of 5.8 per cent on solid performance for the services and manufacturing sectors.
In a research note today, the investment bank said this would be the strongest pace of expansion since 3Q 2017, excluding the COVID-19 pandemic period.
“We believe this likely marks the peak y-o-y performance, though the growth momentum will remain buoyant at above five per cent in the second half of 2024 (2H 2024).
“This is supported by a strong investment pipeline, resilient private consumption amid cash transfers and civil servant salary hikes, as well as continued export recovery,” it said.
As such, CIMB said it will revisit its full-year GDP growth forecast of 4.9 per cent after the release of revised 2Q 2024 GDP data on Friday next week, given the strength of the recovery in 1H 2024 and growth catalysts in 2H 2024.
The bank pointed out that the GDP growth for the services sector is also poised for a stellar rebound, higher than its advance estimate of 5.6 per cent y-o-y.
It shared that improvements in consumer-facing industries, namely retail, motor vehicles, food and beverage services, and accommodation, underscored resilient household spending due to the Hari Raya celebrations, low unemployment, modest inflation, and higher tourist arrivals, which reached 2.1 million in March, close to the 2019 average of 2.2 million.
“There may be positive spillover onto household consumption from withdrawals from the Employees Provident Fund Flexible Account, which amounted to RM7.8 billion between May 12 and June 24, as individual deposits only rose RM3 billion, or 0.3 per cent, between April and June, compared with an average increase of 0.4 per cent over the same period in the past decade,” it added.
-- BERNAMA
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