KUALA LUMPUR – The Malaysian economy notched a higher growth rate of 4.2% for the first quarter of 2024 (1Q 2024), beating the Statistics Department’s initial estimate of a 3.9% gross domestic product (GDP).
The growth is attributed to stronger private expenditure and a positive turnaround in exports, with higher tourist arrivals and increased household spending also contributing to the improved rate.
With the economy having expanded by 1.4% compared to the last quarter of 2023 (4Q 2023) on a seasonally-adjusted basis, most suppliers registered higher growth alongside the better performance.
The manufacturing sector, in particular, was lifted by a rebound across the electric and electronic (E&E) as well as non-E&E industries.
Headline inflation remains moderate at 1.7%, despite increasing slightly from 4Q 2023’s 1.6% due to higher water tariffs and service tax affecting those with high electricity consumption.
However, the headline inflation increase was offset by a decline in core inflation, with the latter moderating to 1.8% from 2%, due to lower inflation for food-related items amid stable cost and demand conditions.
Bank Negara Malaysia (BNM) governor Datuk Abdul Rasheed Abdul Ghaffour said headline and core inflation are projected to remain moderate between 2%-3.5% and 2%-3%, respectively.
“These broadly reflect stabilising demand and contained cost pressures, coupled with some potential upsides that could arise from the implementation of fuel subsidy rationalisation,” he told a press conference here today on the release of the 1Q 2024 GDP statistics.
The media event today was also attended by chief statistician Datuk Seri Mohd Uzir Mahidin.
Rasheed added that the inflation outlook for the rest of the year has factored in downside risks, including softer commodity prices from weaker global growth and slower demand conditions due to weaker-than-expected external demand.
He said the pressure on the ringgit has lessened, following coordinated initiatives by the government and BNM with government-linked companies and government-linked investment companies.
He added that the local currency performed better as further traction was gained through engagements with corporations and exporters, translating into greater and more consistent flows into the foreign exchange market.
“If you consider where we started from the time we initiated coordinated action on February 26, pressure on the ringgit has decreased and resulted in positive outcomes,” Rasheed said. – May 17, 2024