KUALA LUMPUR: Hong Leong Investment Bank (HLIB) Research expects gross domestic product (GDP) to normalise upward to 4.8 per cent year-on-year (YoY), supported by investment and private consumption.
GDP is also poised to benefit from employment growth, wage increases, and new policy options that enable withdrawals from the newly launched EPF Account 3, as well as the implementation of healthy investment intentions.
"Trade activity is also expected to lift GDP growth, following the recovery in the global tech downturn and the low base effect.
"Nevertheless, downside risks remain, stemming from an escalation of geopolitical tensions, particularly in the Middle East, persistent inflationary pressures, and the consequent higher-for-longer global interest rate environment," it said in a note.
Notwithstanding these downside risks, the firm maintained its expectation for Malaysian GDP to improve in 2024 and the overnight policy rate (OPR) to remain at 3.00 per cent in 2024.
The Department of Statistics (DoSM) released an advance estimate for the first quarter GDP on April 19, based primarily on published production data for January and February, and estimates for March, to estimate the GDP by production sector.
"The advance estimate showed GDP gaining momentum to 3.9 per cent YoY, matching the consensus median forecast and slightly higher than our forecast of 3.8 per cent YoY.
"On a quarter-on-quarter (QoQ) basis, Malaysia's economy contracted by 3.4 per cent from 3.1 per cent growth in Q4 2023."
The actual Q1 2024 GDP will be released on May 17.