KUALA LUMPUR: Malaysia's gross domestic product (GDP) could be revised higher to at least 6.0 per cent, according to some analysts.
CIMB Securities Sdn Bhd thinks that its 4.9 per cent forecast for the full year appears conservative now.
The firm stated that the revised figure reflects a robust performance in the services and manufacturing sectors, marking the fastest growth since the third quarter of 2017 (3Q17), excluding the period affected by the Covid-19 pandemic.
"We believe this likely marks the peak year-on-year performance, though the growth momentum will remain buoyant at above 5 per cent in the second half of 2024 (2H24), supported by a strong investment pipeline, resilient private consumption amid cash transfers and civil servant salary hikes, as well as continued export recovery," it said.
CIMB Securities also noted that the services sector's GDP growth is set for a significant rebound, surpassing its preliminary estimate of 5.6 per cent YoY.
It noted that the improvement is reflected in the Services Index (SI), a key indicator of private sector services performance, which accelerated significantly in 2Q24.
"The surge was primarily driven by the insurance sector, which saw its first expansion in nine quarters, as well as the real estate sector, benefiting from improved property transactions, and the finance industry, which experienced increased trading activity in equity and bond markets along with loan growth," it added.
Meanwhile, the firm noted that consumer-facing industries such as retail trade, motor vehicles, food and beverage services, and accommodation also showed growth, indicating resilient household spending fueled by festive celebrations, low unemployment, and moderate inflation.
"There may be positive spillover onto household consumption from the withdrawal from the Employees' Provident Fund (EPF) Flexible Account which amounted to RM7.8 billion between May 12 and June 24, as individual deposits only rose RM3 billion or 0.3 per cent between Apr and Jun, compared with an average increase of 0.4 per cent over the same period in the past decade," said CIMB Securities.