KUALA LUMPUR, May 17 — RHB Investment Bank Bhd (RHB IB) expects Malaysia’s economic growth to accelerate above five per cent year-on-year (y-o-y) in the second quarter of 2024 (2Q 2024) and likely persist into the next quarter.
In a note today, it said its composite indicator or LEI model and Auto Regression (AR) model have accurately predicted the gross domestic product (GDP) and growth momentum since 2023, which allows investors to make pre-emptive portfolio reallocation in optimising their returns.
“The RHB-LEI suggests that Malaysia’s economic growth momentum will see an immediate pickup in 1Q 2024 at 4.5 per cent, against our AR model, which pencils Malaysia’s 1Q 2024 GDP growth at 4.4 per cent.
“Overall, we keep our outlook for Malaysia’s GDP growth at 4.6 per cent in 2024, underpinned by rosy external and domestic factors,” said RHB IB.
The LEI model reinforces the rigour and accuracy of the AR approach and suggests that Malaysia’s economy will be of a better standing in 2024.
RHB IB believes that Malaysia’s economy will be underpinned by resilient domestic expenditure patterns and improvement in tourism activities based on three catalysts.
The catalysts are, firstly, the country’s labour market, which remains tight, with the unemployment rate returning to pre-pandemic levels on the back of healthy job creation rates.
Secondly, Malaysia’s export momentum is expected to pick up in the first half of 2024 on the back of sanguine global growth assumptions, and thirdly, relatively tame inflation pressures are being observed at this juncture.
It noted that the December Consumer Price Index (CPI) registered 1.5 per cent y-oy, but consumer prices are expected to print higher to 3.3 per cent in 2024 from 2023’s 2.5 per cent.
— Bernama
