Initial estimates indicate that Malaysia’s economy will grow by 5.8% in Q2

PETALING JAYA: The Malaysian economy is expected to grow by 5.8% in the second quarter of 2024, up from 4.2% in the previous quarter, according to preliminary estimates.

According to the Department of Statistics Malaysia (DoSM), growth in the second quarter of 2024 will be the highest since the fourth quarter of 2022 (7.4%).

As reported, in the first half of 2024, GDP grew by 5% compared to 4.1% in the same period last year.

The Malaysian economy is expected to maintain its growth momentum, supported by domestic and export factors, with the outlook for the rest of the year being positive.

The increase in household consumption expenditure was caused by public holidays and school breaks, as well as the payment of benefits. Sumbangan Tunai Rahmah Phase 2 in April. In addition, contributors have withdrawn a total of RM6.98 billion from Account 3 (Flexible Account) of the Employees’ Pension Fund (EPF) since June to support short-term financial needs.

According to Malaysia’s Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin, the estimated second-quarter growth is in line with recent indicators such as the industrial production index, which rose 6.1% and 2.4% in April and May respectively from a year earlier.

Meanwhile, the value of wholesale and retail sales increased by 6.6% in April and by 7.1% in May year-on-year.

In the external sector, total trade, exports and imports increased compared to the same period last year. Other factors include increases in tourist arrivals, as well as palm oil production and progress on megaprojects.

Mohd Uzir said: “Economic performance during the quarter was driven by the services sector, with most key sectors showing improved growth compared to the previous quarter. The services sector grew further to 5.6% (Q1’24: 4.7%), boosted by wholesale and retail trade, transportation and warehousing, and finance and insurance.”

The manufacturing sector grew to 4.7% from 1.9% in the last quarter, driven by growth in all subsectors, mainly non-metallic mineral products, basic metal products and fabricated metal products, and petroleum, chemical, rubber and plastic products.

Moreover, the construction sector maintained double-digit growth in Q2 2024, expanding by 17.2% (Q1 2024: 11.9%), driven by strong performance across all sub-sectors, particularly civil engineering and specialist construction.

“The agriculture sector grew by 7.1% (Q1’24: 1.6%) in the quarter, led by the remarkable growth in the oil palm sub-sector. Meanwhile, the mining and quarrying sector declined to 3.3% from 5.7% in the previous quarter, attributed to the moderate growth in the natural gas sub-sector,” Mohd Uzir said.