KUALA LUMPUR, Aug 16 — Malaysia’s economy saw a robust expansion of 5.9 per cent in the second quarter of 2024 (2Q 2024) exceeding earlier prediction of 5.8 per cent, bolstered by resilient household spending, vigorous investment activities, and a significant boost in tourism arrivals.
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 country’s economy expanded by 4.2 per cent in 1Q 2024, bringing the first half’s growth to an average of 5.05 per cent. The gross domestic product (GDP) grew by 2.9 per cent in 2Q 2023.
“The 5.9 per cent GDP growth in 2Q of 2024 is the highest since 4Q in 2022,” he said at the second quarter GDP press conference today.
In terms of sectoral performance, Rasheed said the services sector expanded by 5.9 per cent in 2Q 2024 compared to 4.8 per cent in 1Q 2024, contributed by broad-based improvement in consumer and business-related services.
“The manufacturing sector increased by 4.7 per cent in 2Q 2024 after recording an expansion of 1.9 per cent in the previous quarter, driven by higher growth across export and domestic-oriented industries,” he said.
On agriculture, the sector expanded to 7.2 per cent in 2Q 2024 versus 1.7 per cent in 1Q 2024: 1.7, contributed by stronger production in the oil palm and fisheries subsector, while the construction sector recorded better growth of 17.3 per cent in 2Q 2024 compared to 11.9 per cent in 1Q 2024, supported by higher activities, particularly in the civil engineering and special trade subsectors.
Rasheed said the mining sector showed moderate growth of 2.7 per cent after recording 5.7 per cent in 1Q 2024, due to lower growth in the oil and gas subsector following production disruption in May.
In a statement, he said growth in the second half of 2024 will be driven by domestic spending with continued strong support from external demand.
On the domestic front, BNM noted household spending will be underpinned by continued employment, wage growth, and policy measures.
Investment activities will be driven by progress in multi-year projects across private and public sectors.
Catalytic initiatives announced in national master plans and the higher realisation of approved investments are also key drivers for investment activities.
Externally, it opined that the ongoing global tech upcycle and continued strong demand for non-electrical and electronics goods will lift exports. Improvement in tourist arrivals and spending are expected to continue.
BNM said upside risks to growth include greater spillover from the tech upcycle, robust tourism activities, and faster implementation of existing and new investment projects.
“Downside risks to Malaysia’s growth prospects stem from a downturn in external demand, an escalation in geopolitical conflicts and lower-than-expected commodity production,” it said.
— Bernama
