KUALA LUMPUR: RAM Ratings has upheld its forecast for Malaysia's gross domestic product (GDP) growth in 2024, estimating it to range between 4.5 per cent and 5.5 per cent.
The outlook is supported by stronger and more sustained economic momentum observed in the first half of 2024 (1H24), indicating clearer signs of the country's economic recovery.
"We expect economic growth to remain healthy in the second half of 2024 (2H24), building on the robust momentum from 1H24, which should provide a solid foundation for sustained expansion.
"Domestic demand will remain the anchor for Malaysia's economic growth, supported by a healthy labour market, increased capacity building activity, and continued rollout of multi-year infrastructure projects," it said.
The ratings agency said in 2025 it has pencilled in a growth forecast of 4.0 per cent to 5.0 per cent, as the economy enters a more stable growth phase after a turbulent few years.
"The economy is expected to benefit from the carryover effects of the stronger momentum observed in 1H24, with firmer conditions for domestic consumption and investment supporting its resilience.
"However, private consumption may face headwinds from the potential rollout of RON95 subsidy retargeting," RAM Ratings said.
The firm noted that although ongoing subsidies and financial aid for lower-income households are expected to somewhat cushion the impact, any unintended price ripple effects from a poorly implemented rollout could hinder private consumption growth.
"On the global front, we remain cautious of escalating geopolitical conflicts, heightened US-China tensions, and potential global trade or supply-chain disruptions," it added.