KUALA LUMPUR: Malaysia’s economic growth is expected to remain modest throughout the remainder of 2024, primarily due to weakening external demand and global policy uncertainties, as stated by Hong Leong Investment Bank Bhd (HLIB). The bank has maintained its 2024 gross domestic product (GDP) growth forecast at 5.0 per cent year-on-year (y-o-y).
According to BERNAMA News Agency, HLIB projects that the growth rate will sustain at the same level in 2025. This is anticipated to be supported by strong household spending, tourism activities, and income-enhancing measures such as wage increases for civil servants, a higher minimum wage, and withdrawals from Employees Provident Fund (EPF) Account 3. The bank also noted that continued improvement in export activity, progress in multi-year projects, and healthy investment intentions are expected to bolster investment growth.
Public Investment Bank Bhd (PIB) shared similar sentiments, projecting that Malaysia’s economic growth in the upcoming quarters will be driven
by robust investment activity and resilient household consumption, bolstered by export performance. PIB highlighted that investment activity is likely to gain momentum from the ongoing execution of multi-year infrastructure projects across both private and public sectors, along with initiatives under national development plans and increased realisation of approved investments. Furthermore, private consumption is anticipated to remain strong, driven by sustained income growth and enhanced policy measures, thus further strengthening domestic demand.
On the external front, PIB expects exports to benefit from positive spillovers from the global tech recovery. The tourism sector is also projected to maintain its momentum, with rising tourist arrivals and increased spending levels playing a significant role. However, Maybank Investment Bank Bhd has adjusted its 2025 growth forecast downward to 4.9 per cent from 5.1 per cent, citing increased external uncertainties following Donald Trump’s recent victory in the US
presidential election. The bank identified US trade policy as the biggest risk factor to the growth outlook, as ‘Trump 2.0’ pledged higher tariffs on all imports from China and globally.
Despite these external challenges, Maybank noted that domestic economic factors could mitigate some of the risks. The ‘investment upcycle’ thesis for Malaysia remains intact, supported by the implementation of robust approved investments and initiatives under the MADANI Economy framework. Meanwhile, PIB projected that Malaysia’s current account surplus is expected to expand to RM49.1 billion or 2.4 per cent of gross national income (GNI), driven by improvements across key sectors as outlined by the Ministry of Finance. The goods account is anticipated to post a higher surplus, supported by stronger trade momentum with major trading partners, while the services account is expected to see a reduced net outflow, buoyed by increased earnings in various segments.
The current account surplus is forecasted to rise further to 2.3 p
er cent of GNI in 2024, up from RM28.2 billion (1.6 per cent of GNI) recorded in 2023, reflecting a notable improvement despite last year’s challenges.