The Malaysian economy has the opportunity to achieve growth of 6% this year based on strong trade performance and domestic spending.
The basis was laid out by MIDF Amanah Investment Bank in its research note by maintaining Malaysia's gross domestic product (GDP) growth forecast at 6% this year.
It is a 2-fold increase from the 3.1% record achieved last year.
The description of the note further states that the encouraging momentum in the domestic economy will continue until the 2nd half of 2022 (2H2022).
In support of those fundamentals, MIDF cited the leading index (LI) rebounding in positive growth during May at 2.2% year-on-year after 3 months of contraction, supported by import activity.
He added that the current economic activity is also seen to increase with the correction index (CI) standing at 6.4% year-on-year which is the highest expansion in 12 months and is supported by a strong retail trade business.
In addition, the country also recorded a strong foreign trade performance in June with export growth jumping 38.6% year-on-year and domestic exports strong at 30.5%.
The surge was supported by increased external demand for electrical and electronic goods (E&E), petroleum, palm oil and liquefied natural gas (LNG).
Arguing about domestic spending, the continued recovery of the job market in addition to increased mobility and tourist arrivals open opportunities for the country's growth.
Overall, price pressure in Malaysia remains stable as a result of capped retail fuel prices and MIDF projects the consumer sector and private services to be the main contributors to growth in the 2nd quarter (Q2) and 2H2022.
