Malaysia's GDP Expected to Move Faster Throughout 2024


Economists expect Malaysia's Gross Domestic Product (GDP) to grow faster this year as wholesale and retail trade in February expanded to a three-month high of around 5.5% year-on-year.

Looking at the year's better growth, Kenanga Research maintains its sales growth forecast at 8% for 2024 which is higher than the 7.7% growth recorded in 2023.

The forecast for stronger sales growth this year is driven by robust domestic demand that is supported by a projected decline in the unemployment rate to an average of 3.2% this year and an increase in overseas tourist spending.

However, uncertainty in the subsidy rationalization mechanism may affect consumer spending and further affect overall sales growth.

Previously, the Ministry of Finance forecast Malaysia's GDP to grow between 4% and 5% this year after the country achieved growth of 3.7% in 2023 and grew 8.7% in 2022.

This indicates that stronger economic growth in the first quarter of 2024 supports its annual GDP growth forecast of 4.4% in 2024 compared to 3.7% recorded in 2023.

According to data from the Department of Statistics, Malaysia's wholesale and retail sales increased 5.5% to RM142.1 billion in February compared to the previous year. It is also positive compared to January's increase of 5.4% and December's 4.8%.

MIDF Amanah Investment Bank said it maintained a forecast of 7.5% expansion in retail trade for 2024 supported by a resilient labor market, positive real wage growth, improved tourism activity and accommodative economic policy.

However, the research firm warned that upward inflationary pressures could affect consumer demand depending on the potential impact of targeted subsidy approaches and global commodity price volatility.