RHB Reaffirms Optimistic 2024 GDP Forecast On Strong July Trade

KUALA LUMPUR, Aug 19 (Bernama) -- RHB Investment Bank Bhd has reaffirmed its optimistic outlook on Malaysia’s gross domestic product (GDP) for 2024, buoyed by resilient trade data from July.

The investment bank recently revised its 2024 full-year GDP forecast to five per cent year-on-year (y-o-y), up from the previous projection of 4.6 per cent.

In a note today, RHB highlighted that July's exports accelerated by 12.3 per cent y-o-y, surpassing both market consensus of nine per cent and its in-house projection of 7.6 per cent.

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Meanwhile, imports surged by 25.4 per cent y-o-y, exceeding the consensus estimate of 14.4 per cent and the bank's projection of 16.4 per cent.

In its Global Economics & Market Strategy report, the bank noted that Malaysia’s GDP expanded by 5.1 per cent in the first half of 2024 (1H2024), driven in part by the strong export performance.

“Our expectation for Malaysia's GDP to accelerate in the second quarter (2Q2024) has materialised, as indicated by our proprietary GDP leading index model, which predicts growth of over five per cent y-o-y.

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“This model also forecasts Malaysia's GDP growth to reach 5.2 per cent in 3Q2024 and 4.6 per cent in 4Q2024,” the report stated.

For the remainder of the year, RHB expects both external and internal factors to fuel growth.

“We anticipate further acceleration in trade and manufacturing activities, alongside continued resilience in domestic demand driven by increased consumer and investment spending,” it said.

The bank added that export-oriented sectors, including electronics and electricals, energy and metal goods, will remain well-supported by robust economic growth in major economies, a resurgence in the global technology cycle and strong commodity prices.

“Our optimistic view on the global economy remains unchanged, supported by robust economic performance in major economies such as the United States, China, and select ASEAN countries.

“Notably, momentum for both capital and intermediate goods imports has trended upwards, signalling optimism and potential expansion in manufacturing activities,” it said.

RHB also observed that global semiconductor industry sales posted a notable increase of 18.3 per cent y-o-y in 2Q2024.

The World Semiconductor Trade Statistics organisation has projected a 16 per cent y-o-y growth in the global semiconductor market.

Meanwhile, commodity-based sectors, such as petroleum and petroleum-based products and non-metal mineral and metal products, are expected to benefit from higher commodity prices amid increased global demand, it added.

-- BERNAMA