Economic Update
Local
Gross Domestic Product (GDP) - 1Q24: Malaysia’s Economy Off to a Strong Start
Mon, 20-May-2024 07:54 am
by Jayden Tan, Chelsea Chew • Apex Research

  • Substantial growth observed in the latest quarter. In the first quarter of 2024, Malaysia's Real GDP expanded by +4.2% yoy, a significant improvement from the preceding quarter (4Q23: +2.9% yoy, mainly driven by the services and manufacturing sectors. This aligns with the Economic Outlook for ASEAN countries, standing at 4.5% according to IMF. Following seasonal adjustments, the Malaysian economy saw a quarterly increase of +1.4% qoq (vs 4Q23 at +1.0% qoq), meeting both market and our in-house expectations ranging from +4.3% to +4.1% yoy. The favourable performance from the services sector, coupled with expansion in the manufacturing sector, as well as increased household final consumption expenditure and gross fixed capital formation, largely contributed to the said growth.


  • Improved employment rate stimulates household spending. Malaysia's economy grew by +4.8% yoy and +5.0% yoy in January and February, respectively, but easing in March to +2.9% yoy. Higher household consumption expenditure, buoyed by stable labour market conditions and a low unemployment rate (1Q24 was at 3.3% compared to 3.6% in 4Q23), supported the economy. Festive seasons, the start of the 2024 school sessions, and government incentives attributed to increased household spending. Additionally, a surge in tourist arrivals boosted tourism-related activities. Economic performance was further bolstered by large-scale projects, data center investments, and improvements in the application period for foreign workers, particularly in the plantation sector. Throughout the quarter, the services and manufacturing sectors drove economic growth on the supply side, while private final consumption expenditure and gross fixed capital formation were key drivers of demand.
Sentiment: Positive
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