OCBC Revises Malaysia's 2024 GDP Growth Forecast Upwards To 5.0 Pct

KUALA LUMPUR, Aug 19 (Bernama) -- Oversea-Chinese Banking Corp (OCBC) has revised its gross domestic product (GDP) growth forecast for Malaysia upwards to 5.0 per cent year-on-year (y-o-y) from 4.2 per cent previously after the country recorded a strong 5.9 per cent GDP growth in the second quarter of 2024 (2Q 2024).

In its Global Market Research note published today, the banking group’s senior Asean economist, Lavanya Venkateswaran, forecasted Malaysia’s GDP growth to remain strong in the second half of 2024 (2H 2024), averaging 4.9 per cent y-o-y versus 5.1 per cent in the first half of 2024 (1H 2024). 

“This is supported by the bottoming out of the global electronics downcycle, higher investment spending underscoring progress on the government’s medium-term economic development plans and resilient household spending.

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“This will be at the upper bound of the official 4.0-5.0 per cent GDP growth target range for 2024. For 2025, we continue to expect the economy to grow by 4.5 per cent y-o-y,” she said. 

Meanwhile, for 2024, Lavanya said Malaysia’s current account surplus is expected to widen to 2.5 per cent of GDP from 1.5 per cent in 2023.

On Aug 16, it was reported that Malaysia’s economy saw a robust expansion of 5.9 per cent in 2Q 2024, bolstered by resilient household spending, vigorous investment activities and a significant boost in tourism arrivals, which exceeded the earlier prediction of 5.8 per cent, 

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Bank Negara Malaysia (BNM) governor Datuk Seri Abdul Rasheed Ghaffour said the central bank views Malaysia’s growth as on track to end the year near the upper end of the 4.0-5.0 per cent forecast range.

“The 5.9 per cent GDP growth in 2Q of 2024 is the highest since 4Q in 2022,” he said. 

According to Lavanya, the solid growth outlook and well-contained inflation pressures, albeit trending higher in 2H 2024, will allow BNM room to keep the policy rate unchanged for the rest of this year.

“Moreover, the measures undertaken by the authorities since late February are bearing fruit, and the ringgit has outperformed regional peers.

“BNM also noted that the daily average foreign exchange trading volume was higher (US$18 billion) compared to prior to the measures (Jan 2 - Feb 23, 2024: US$15 billion),” she added. (US$1 = RM4.43)

-- BERNAMA