KUALA LUMPUR: The substantial increase in the Leading Index (LI) indicates a positive economic outlook for Malaysia in 2024, according to MIDF Research.
Malaysia's LI rose 4.3 per cent year-on-year (YoY) in April, up from 2.3 per cent in March, marking the highest growth since July 2022.
The firm said the increase was driven by improvements in all components except for real imports of semiconductors, which declined 1.5 per cent YoY.
"Current economic conditions remained favourable, as indicated by the Coincident Index (CI), which grew by 3.0 per cent YoY, the fastest increase in three months.
"The continuous growth in the CI was primarily due to a double-digit increase in real Employees Provident Fund (EPF) contributions at 34.1 per cent, reflecting more people entering the job market," MIDF Research said.
The firm noted that compared to the previous month, the CI rose by 0.3 per cent, with the only setback being lower capacity utilisation in the manufacturing sector declining by 0.2 per cent.
"The positive growth in both the LI and CI also indicates that growth momentum will remain favourable, at least in the near term," it noted.
Consequently, MIDF Research maintained its forecast that Malaysia's gross domestic product (GDP) growth will increase to 4.7 per cent in 2024.
This projection is supported by a continued rise in domestic demand and a rebound in external trade activity.