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Malaysia’s economy grew at its fastest pace in six quarters, indicating that the recovery seen earlier this year is accelerating. The gross domestic product (GDP) increased by 5.8 percent in the April-June quarter compared to the same period last year, the highest rate since the December quarter of 2022 and surpassing the top estimate of 5.1 percent in a recent survey. This performance follows a 4.2 percent growth in the first three months of 2024.
The US$400 billion (S$537 billion) economy, which grew by 8.7 percent in 2022, saw a slowdown last year due to weak global demand. The International Monetary Fund forecasts that economic output will improve to 4.4 percent this year, up from 3.7 percent in 2023.
Prime Minister Anwar Ibrahim has been positioning Malaysia as a regional tech hub, attracting significant investment pledges from major companies like Google and Microsoft. Exports also increased for the third consecutive month in June, with further improvements expected due to a global tech upcycle, according to the central bank. Domestic consumption is likely to be bolstered by cash handouts and higher wages for civil servants.
According to Maybank Investment Bank analysts Suhaimi Ilias and Wong Chew Hann, Malaysia is set to benefit from “a trifecta of positives” this year: improving private investment, recovery in external demand, and resilient consumer spending. They predict a growth rate of 4.7 percent for the year.
However, the outlook could be affected by an uneven or slower recovery in China, Malaysia’s largest trading partner, which is crucial for tourism and investment. Bank Negara Malaysia anticipates GDP growth between 4 percent and 5 percent this year, driven by improving external demand.
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