KUALA LUMPUR, Oct 1 (Bernama) -- Malaysia's positive economic momentum is expected to be sustained in the coming months as the Leading Index (LI) grew at 5.2 per cent year-on-year (y-o-y) in July 2024.
The LI is a predictive tool used to anticipate economic upturns and downturns approximately four to six months in advance.
MIDF Amanah Investment Bank Bhd research arm, MIDF Research said this marks the 8th consecutive month of growth, primarily driven by robust increases in Real Imports of Semiconductors (36.7 per cent y-o-y) and the Bursa Malaysia Industrial Index (35.4 per cent y-o-y).
“The continued rise in LI indicates that Malaysia's economy would continue growing positively in the second half of 2024,” it said in a statement today.
Looking at the continued improvement in LI, MIDF Research maintained its projection that Malaysia’s gross domestic product (GDP) growth will expand at 5.0 per cent from 3.6 per cent in 2023, underpinned by growing domestic spending and recovering international trade.
On a month-on-month basis, the LI has rebounded by 1.1 per cent month-on-month compared to a 0.4 per cent decline in June 2024.
This is primarily due to the continued growth in Real Imports of Semiconductors (1.0 per cent m-o-m) and the increased number of new company registrations (0.5 per cent m-o-m).
Meanwhile, MIDF Research continues to forecast that Malaysia’s economic growth will expand faster at 5.0 per cent.
“The positive growth fundamentals will continue in the second half of 2024 as indicated by continued expansion in LI, and we expect Malaysia’s economy to grow this year underpinned by increased domestic spending and recovery in the external trade,” it said.
Nevertheless, it remains cautious that Malaysia’s growth outlook may be constrained by several downside risks such as weak growth in major economies (such as China and the United States), worsening of geopolitical and trade tensions, and renewed disruptions to the global supply chain and trade flow.
“On another note, possible re-acceleration in inflationary pressures from planned policy changes may adversely affect consumer sentiment and their discretionary spending,” it added.
-- BERNAMA
