KUALA LUMPUR, Feb 27 — RAM Rating Services Bhd (RAM Ratings) has maintained its forecast of Malaysia’s gross domestic product (GDP) growth at 4.5 per cent to 5.5 per cent in 2024.
The leading credit rating agency also believed that there is an upside lift for the economy in 2024, despite the fourth quarter of 2023 (4Q 2023) performance, which grew at 3.0 per cent.
It said the chance of a “soft landing” appears to be higher for the global economy, with the International Monetary Fund (IMF) raising its 2024 global growth forecast by 0.2 percentage points to 3.1 per cent last month.
It said Malaysia’s export growth also contracted at a slower pace of 6.9 per cent in 4Q 2023 (2Q 2023: -11.1 per cent; 3Q 2023: -15.2 per cent), with the January 2024 print showing a rebound in growth to 8.7 per cent.
“Coupled with the predicted upcycle in trade and semiconductors, we may be seeing early signs of a turnaround in global trade.
“The IMF forecasts global trade growth to recover from 0.4 per cent last year to 3.3 per cent this year,” it said in a statement.
Furthermore, RAM Ratings said the latest inflation print in January 2024 continues to point towards easing of price pressures (as headline inflation remained at 1.5 per cent), which, along with a robust job market and supportive financial conditions, could propel domestic demand higher this year.
“Up ahead, key risks on the horizon remain, with the timing of interest rate cuts in the United States exerting potential market volatility and imported price pressures for the domestic market due to weak ringgit valuation.
“Escalating geopolitical conflicts could threaten the global commodity market and supply chain again.
“Domestically, we remain watchful over the execution of RON95 subsidy retargeting in the second half of 2024,” it said.
It noted that Malaysia’s 2023 GDP growth stood at 3.7 per cent versus the consensus 4.0 per cent, mainly due to weaker export demand and cooler consumption momentum. — Bernama
