FMM Projects 2024 Economic Growth To Exceed 4.0-5.0%

The Federation of Malaysian Manufacturers (FMM) has revised upwards the 2024 economic growth projection given the stronger-than-expected momentum in the second quarter (2Q 2024).

In a statement, FMM said the new forecast suggests that growth will likely exceed the government's 4.0 to 5.0% target range with a revised 5.1% gross domestic product (GDP) growth.

“Private investment and consumption spending have also been revised upwards, reflecting the economy's strong recovery trajectory. Malaysia's economy is on a robust recovery path, driven by strong exports, private consumption, and investments.

“Despite global uncertainties, we expect the economy to continue its positive growth trend throughout the rest of 2024,” it said.

FMM said the economy expanded by 5.9 % in 2Q 2024, the highest since 1Q 2017, up from 4.2% in 1Q 2024, driven by a strong export-led recovery, robust domestic demand, and a surge in tourist arrivals.

“Growth was driven by a robust export sector, with real exports up by 8.4% in 2Q, supported by strong demand for commodities, electronics, and petroleum products.

“The manufacturing sector also benefited from capacity expansions and relocations, partly due to the US curbs on Chinese technology,” it said.

The statement also said inflation is expected to rise in the second half of 2024 with Bank Negara Malaysia projecting "a manageable increase" within a 2.0 to 3.5% forecast.

“The ringgit has rebounded strongly against the US dollar to reach an 18-month high and is expected to maintain an appreciating bias in the coming months,” it said.