RHB Research is expecting that Malaysia’s Gross Domestic Product (GDP) to stay at 4.6% for this year, which is on par with the official projected range of 4.0% to 5.0%.
According to a report from Bernama, RHB Research stated that this is due to improving domestic confidence, which can be seen from three factors; higher manufacturing purchasing manager’s index, increased imports of capital and intermediate goods, and rising business confidence.
This suggests that optimism is rising for both manufacturers and businesses.
The same report also stated that growth momentum is anticipated to pick up in the first half of 2024.
Speaking on the downside risk, RHB Research says that they recognise that dampening effects might come into play in the second half of the year once the reduced subsidies and revised consumption tax measures comes into effect.
These two factors might cap consumer expenditure and disposable income of Malaysians.
Dampening factors can be cushioned
However, RHB Research expects the dampening effects to be cushioned by other factors, such as healthy labor demand conditions, continued social assistance to targeted groups, and differing impacts across income group.
Another factor that plays into RHB Research’s forecast is investment spending, which they expect to stay robust for the rest of the year.
RHB Research expects private investment to be buoyed by capacity expansion and business-friendly policies, while public investment will be supported by the continuation of multi-year projects under Malaysia’s long term plans.
RHB Research also gave their thoughts on the fiscal deficit projection, which they expect to stay at 4.3% of the GDP.
