MALAYSIA'S ECONOMY POISED FOR AN EXPORT-LED RECOVERY - FMM

The Federation of Malaysian Manufacturers (FMM) believes the nation's economy is poised for an export-led recovery.

President Tan Sri Soh Thian Lai said this can be seen by the Purchasing Managers' Index (PMI) reading, signalling manufacturing activities have troughed and are on course for a gradual recovery.

“While the surge in intermediate imports foreshadows an export recovery, a tourism boom and a pick-up in investment momentum would add support,” he said in a statement.

“A better second half of 2024 is expected as global monetary conditions ease.

“Developed markets' central banks are expected to cut interest rates in the second half of 2024. The ringgit exchange rate will, therefore, end 2024 on a firmer footing,” he said, adding that there is no need to peg the currency.

Malaysia's foreign reserves cover is adequate and the current account balance remains in surplus.

The federation foresees Malaysia's economic growth to settle at the lower end of the official forecast range of 4 to 5% in 2024.

Soh said private consumption is expected to slow while inflation rebounds.

“Consumer spending likely would be more restrained in 2024, with the hike in service tax rate and the government subsidy rationalisation programme, which would exert pressure on inflation and the cost of living,” he noted.