Amro Sets Malaysia's Economic Growth Forecast At 4.7 Pct For 2024

KUALA LUMPUR, July 16 (Bernama) -- The Asean+3 Macroeconomic Research Office (Amro) has revised Malaysia’s economic growth forecast to 4.7 per cent for this year, from the previous projection of 5.0 per cent, said chief economist Hoe Ee Khor.

He said this was due to the slower-than-expected recovery in the export sector compared to some countries. 

“But it is still a very strong growth," he said during AMRO's latest quarterly update on the ASEAN+3 Regional Economic Outlook (AREO) held virtually today.

Hoe added that AMRO has raised its 2025 gross domestic product (GDP) growth forecast for Malaysia to 4.9 per cent from 4.7 per cent previously, on the back of an expected strong rebound in exports, resilient domestic demand and investments.

“The export recovery is a bit slow this year but will be stronger next year.

“Investments that have come in in the past few years will be implemented this year and in 2025, which will help support Malaysia’s economy,” he added.

Commenting on ringgit, Hoe said the currency has been performing well since February as the country’s economy has done well.

“The government has taken some measures to encourage government-linked companies and government-linked investment companies to utilise their investment earnings, to help support the foreign exchange market.

“The economy also is benefiting from the turnaround in the external headwind which also help to support the balance of payment at the same time,” he added.

Hoe said significant headwinds had affected the economy last year, resulting in a somewhat depreciated ringgit.

“Many other regional currencies were also weak. However, there has been a turnaround in external demand due to measures taken by the authorities.

“We anticipate that the ringgit will be somewhat stronger than last year," he said.

As for the regional currencies, he noted that much currently hinges on the United States (US) Federal Reserve’s (Fed) policy.

Currently, the market expects that the US interest rate will be cut by 50 basis points, while the Fed's stance suggests only one rate cut.

“If inflation and interest rates remain higher than anticipated, regional currencies may weaken somewhat.

“Conversely, if the Fed does proceed with a 50 basis points rate cut, it is believed that this would weaken the US dollar and strengthen regional currencies,” he said.

-- BERNAMA