KUALA LUMPUR, Sept 10 — Two investment banks have kept their projections for Malaysia’s economic growth above 5.0 per cent for 2024, attributing this to a supportive domestic economic environment and a recovery in external demand.

Hong Leong Investment Bank (HLIB) has maintained its forecast for gross domestic product (GDP) growth at 5.0 per cent in 2024.

It said this forecast is supported by a healthier labour market and domestic policies expected to continue bolstering consumer spending.

According to HLIB, Malaysia’s labour market is anticipated to remain stable throughout the year, driven by increased tourism activities, expanded exports, and job-related initiatives under various national masterplans.

In July, Malaysia’s labour market continued to improve, buoyed by positive economic growth and better export performance.

"The decline in the number of unemployed persons accelerated on a month-on-month basis (-0.3 per cent; June: -0.1 per cent) but slightly moderated on a year-on-year basis (-2.7 per cent; June: -2.8 per cent).

"The unemployment rate remained steady at 3.3 per cent (June: 3.3 per cent),” HLIB said in a research note.

The labour force expanded steadily, with month-on-month growth of 0.1 per cent and year-on-year growth of 1.7 per cent, reflecting continued confidence in the job market and overall economy.

Consequently, the labour force participation rate remained stable at 70.4 per cent.

Meanwhile, CIMB Research has maintained its GDP forecast at 5.2 per cent for the year, driven by expectations of a recovery in external demand due to the global tech upcycle.

This forecast also reflects strong domestic spending, supported by robust investments and resilient consumer spending in the latter half of 2024.

CIMB noted that July’s distributive trade volume growth of 5.5 per cent year-on-year, up from 4.9 per cent in the second quarter of 2024, indicates a positive outlook for service activities in the early third quarter of 2024.

"The increase in tourist arrivals and receipts (first half of 2024: +28.9 per cent; +50.8 per cent year-on-year), along with buoyant motor vehicle sales (first half of 2024: 7.2 per cent), will likely support the overall services sector in the second half of 2024, underpinning our 2024 services sector estimate of 5.5 per cent,” added CIMB Research. — Bernama