KUALA LUMPUR, Aug 16 — Malaysia is expected to record strong export figures in the second quarter of 2024 (2Q 2024) despite consensus projection of sluggish external markets this year.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said that generally the external demand has been quite decent and nominal exports for the 2Q 2024 grew by 5.8 per cent while the nominal imports posted a double-digit growth of 15.0 per cent in 2Q 2024.

“However, higher import growth, while it indicates the strength of our domestic demand, also suggests that the country is increasingly relying on foreign sources to meet local demand,” he told Bernama.

Nonetheless, Mohd Afzanizam said higher imports would result in lower net exports which can lower the Gross Domestic Product (GDP) computation.

“There is an urgent need to promote investments for the country to improve and reduce our dependency on foreign sources for production input,” he added.

Despite higher imports, Mohd Afzanizam estimates trade surplus to continue in 2Q 2024.

Total exports and total imports are essential components for the estimation of a country’s GDP.

In January-March 2024, Malaysia’s trade performance continued its upward trajectory, expanding by 7.1 per cent year-on-year (y-o-y) to RM690.59 billion with a RM34.22 billion surplus.

For the first quarter of this year, exports rose by 2.2 per cent y-o-y to RM362.41 billion while imports rose 13.1 per cent y-o-y to RM328.19 billion.

Meanwhile, economic Prof Emeritus Barjoyai Bardai from the University of Science and Technology said the country’s strong economy will contribute to the GDP’s growth which is projected at 5.8 per cent in the second quarter of 2024 compared to 4.2 per cent in the first quarter.

“With better economic sentiment, supported by market confidence, private spending increases.

“Our exports and imports are expected to increase in the second quarter of this year. Imports are seen to increase because of better domestic demand, with the value of raw food material imports worth almost RM80 billion,” he said.

He said Malaysia recorded the highest amount of approved investments in the country’s history, amounting to RM329.5 billion in 2023, which is 23 per cent higher than in 2022, showing the interest of foreign investors to enter the country’s market.

Commenting on the full year GDP outlook, the Association of Chartered Certified Accountants (ACCA) forecast Malaysia’s economy to expand by between 4.0 per cent and 5.0 per cent, up from 3.7 per cent in 2023, further bolstering business confidence.

Bank Negara Malaysia is expected to announce the 2Q 2024 GDP figures later today. — Bernama