Malaysia Beats Forecasts As Economy Gathers Pace

Malaysia’s economy appears to have shrugged off global uncertainties, with advance estimates pointing to stronger-than-expected growth in the second quarter (Q2).

This underscores the resilience of domestic demand and broad-based economic activity, economists said.

The upbeat performance came despite heightened geopolitical tensions and elevated fuel prices, they added.

This suggested businesses have adapted to a challenging global environment while government policies helped cushion the impact of higher costs.

Advance estimates released by the Statistics Department today showed the country’s gross domestic product (GDP) may have expanded 5.8 per cent in the second quarter (Q2), accelerating from 5.4 per cent in the previous quarter.

Growth was broad-based, with almost all major economic sectors recording expansion. Agriculture was the only sector to contract during the quarter.

UniKL Business School economic analyst Associate Professor Dr Aimi Zulhazmi Abdul Rashid said the estimated 5.8 per cent growth is likely to mark the economy’s strongest performance this year.

He expects Malaysia’s full-year GDP growth to come in between 5.0 per cent and 5.4 per cent.

A significant slowdown is unlikely unless a major external shock hits the global economy.“A contraction in growth will only happen if there is a major global shock,” Aimi told Business Times.

He added that growth will moderate in the second half of the year to hover between 4.5 per cent and 5.2 per cent mainly lifted by a solid domestic demand.

“Low unemployment at about 3.2 per cent, stable wages, strong tourism, and ongoing projects like Johor-Singapore Special Economic Zone, data centers and infrastructure will keep consumption and investment going.“Banks are also healthy, credit growth is stable, and government spending is still supportive,” he said.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the advance GDP for Q2 exceeded expectation.