KUALA LUMPUR, June 20 — RHB Investment Bank Bhd has upheld its projection for Malaysia’s gross domestic product (GDP) growth and inflation rate in 2024, forecasting 4.6 per cent year-on-year (y-o-y) and 3.3 per cent y-o-y, respectively.
It said that based on the recent Bank Negara Malaysia (BNM) Sasana Symposium 2024, it inferred three key findings, including a robust outlook on the country’s GDP growth and the ringgit for the year.
“Secondly, the structural reforms would focus on a few key areas such as fiscal sustainability, social protection enhancement, and quality investment promotion,” RHB said in a note today.
Thirdly, the inflation rate would remain aligned with the official inflation target between two per cent and 3.5 per cent for this year.
“The discussions and remarks by the officials in the symposium have further reinforced our in-house view of a more optimistic view of Malaysia’s economic outlook,” it concluded.
RHB also noted that the panel session on the ringgit, bonds, and the equity market has highlighted that the local currency is expected to strengthen as the United States Federal Reserve will likely reduce the Federal Funds Rate by the end of 2024.
“In the meantime, BNM is actively engaging with the corporates to repatriate foreign currency funds and attract fund flows into the market to stabilise the ringgit,” it said.
Furthermore, the export recovery is expected to gather momentum, supported by the global technology upcycle and continued strength in non-electrical and electronics goods.
On the domestic front, RHB's economists noted that continued employment and wage growth would support household spending.
“The ongoing progress of multiyear private and public projects, catalytic initiatives under the national master plans, and the higher realisation of approved investments would support investment activity.
“Meanwhile, the Employees Provident Fund’s domestic investments, which account for 62 per cent of its total assets (mainly invested in fixed income instruments), would continue to provide long-term income stability through interests and profits,” they opined.
— Bernama
