Economic Update
Local
3Q24 Malaysia Gross Domestic Product: Economic Growth Staying Resilient
Mon, 18-Nov-2024 06:53 am
by Kenneth Leong • Apex Research

Executive Summary

  • Malaysia’s 3Q24 GDP growth held steady at +5.3% yoy (2Q24 at +5.9 yoy), and was in-line with advanced estimate of +5.3% yoy. Growth was driven by (i) strong expansion in overall investment activities, (ii) firmer exports and increase in tourism spending and (iii) resilient household spending.

 

  • For 9M24, the economy expanded +5.2% (9M23 at +3.8% yoy), which largely on track to meet the Government projection of +4.8%-5.3% for 2024 tabled under Budget 2025 as well as our internal projection of +5.2% yoy.

 

  • We expect Malaysia’s Real GDP growth to hold steady in the final quarter, bringing 2024 growth at +5.2% yoy vs. +3.6% yoy in 2023, backed by (i) stability of labour market conditions to be supportive towards domestic consumption, (ii) execution of multi-year projects from approved investments, (iii) stronger trade activities and (iv) implementation of new economic reformation policies such. Meanwhile, 2025 GDP growth is projected at +4.6% yoy (unchanged), pending further details on the shift in US trade policies and tariffs.

 

  • Headline and core inflation is projected at +2.1% yoy and +2.0% yoy in 2024, in line with BNM’s projection of 2.0%-3.5% and 2.0%-3.0% respectively, impacted by the implementation of the diesel subsidy rationalisation and hike of the SST to 8.0%, while 2025F headline and core inflation is forecasted higher at +2.6% yoy and +2.4% yoy, in anticipation of the implementation of RON95 targeted subsidy rationalisation in 2H25.

 

  • With expectations that BNM will maintain OPR at 3.0% towards end-2025, we raised our 2024 and 2025 year-end projection for USD/MYR is between 4.40-4.50 (previously at 4.20-4.30) and 4.30-4.40 (previously at 4.10-4.20) respectively, to account for the intensified trade conflict and a more gradual interest rate cut approach from the US Federal Reserve (three cuts in 2025).

Sentiment: Positive
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Market Mover
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USD 4.436869 4.470612
EUR 4.675505 4.679374
CNY 0.611103 0.611560
HKD 0.570272 0.574102
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