KUALA LUMPUR, May 17 ― Headline inflation is expected to remain moderate this year between 2.0 per cent and 3.5 per cent, broadly reflecting stabilising demand and contained cost pressures, said Bank Negara Malaysia (BNM).

Core inflation, meanwhile, is projected to moderate between 2.0 per cent to 3.0 per cent in 2024.

Governor Datuk Abdul Rasheed Ghaffour said the inflation outlook is subject to some potential upside that could arise from the implementation of the fuel subsidy rationalisation.

"The outlook for the rest of the year is dependent on the implementation of domestic policy on subsidies and price controls, as well as global commodity prices and financial market developments,” he said when announcing the gross domestic product (GDP) performance for the first quarter of 2024 (1Q 2024) here, today.

Abdul Rasheed also said that Malaysia's economic growth in 2024 would be driven by resilient domestic expenditure with additional support from the recovery in external demand.

He said the continued employment and wage growth would support household spending.

"Investment activities will be driven by progress in multi-year projects across private and public sectors, alongside catalytic initiatives announced in national master plans, as well as the higher realisation of approved investments.

"Improvement in tourist arrivals and spending are expected to continue,” he said.

However, Abdul Rasheed said the growth outlook remains subject to downside risks stemming from weaker-than-expected external demand, further escalation in geopolitical conflicts, and larger declines in commodity production domestically.

"Nonetheless, there are upside risks from greater spillover from the tech upcycle, more robust tourism activities and faster implementation of existing and new investment projects,” he said. ― Bernama