KUALA LUMPUR, Aug 16 — Bank Negara Malaysia (BNM) governor Datuk Abdul Rasheed Ghaffour today announced that the country’s economy advanced by 5.9 per cent in the second quarter of 2024.

He explained that the growth is fuelled by increased domestic demand and continued expansion in exports.

“This was also supported by higher household spending and any positive labour market conditions and larger policy supported pickup in export boost and tourist arrival as well as a robust expansion in investment activities on a seasonal adjusted quarter,” he said during a press conference on the release of Q2 2024 GDP Statistics here today.

He then went on to say that on a quarter basis, GDP showed a stronger momentum of 2.9 per cent, higher than the 1.5 per cent recorded in the first quarter of 2024.

On the expenditure side, Abdul Rasheed said domestic demand was driven mainly by private sector spending.

“The growth of household spending was attributed to higher consumption in food and beverages, transport and restaurant and hotel.

“The growth in investment reflected robust capacity expansion by businesses as well as continued precious spending by government and public corporations,” he added.

Meanwhile, he said the net export registered a positive turnaround due to the stronger export recovery and higher external demand and global technology upcycle.

He explained that manufacturing expanded by 4.7 per cent, the construction sector increased by 17.3 per cent, agriculture grew by 7.2per cent, and mining production saw a 2.7 per cent rise.

The governor also noted that expectations of imminent United States (US) policy rate cuts have eased pressure on regional currencies, including the ringgit.

“The ringgit has been appreciating as of late with financial market participants expecting imminent policy rate cuts from US federalism.

“This has softened the US dollar and elevated pressure on regional currencies, including the ringgit,” he added.

With these latest developments, he said the ringgit has now appreciated year to date by 3.1 per cent against the US dollar.

Globally, he explained the monetary policy path is shifting towards central bank easing.

“But it is important to acknowledge that financial markets remain susceptible to economic developments, including growth prospects and any divergence between market participants’ expectations and central banks actions,” he said.