THE Malaysian economy grew 5.9% in the second quarter of the year, up from 4% in the last quarter, largely driven by stronger domestic demand and more exports, Bank Negara Malaysia said.
Household spending increased amid sustained positive labour market conditions and larger policy support, the central bank said in a statement.
“Investment activity was underpinned by continued progress in multi-year projects and capacity expansion by firms," it said.
“Exports improved amid higher external demand and positive spillovers from the global tech upcycle. Most supply-side sectors registered higher growth."
It said the manufacturing sector was supported by broad-based improvement across all clusters, particularly in electrical and electronics.
The services sector also recorded strong growth, driven by consumer and business-related sub-sectors. On a quarter-on-quarter seasonally-adjusted basis, the economy expanded by 2.9%, compared to 1.4% in the previous quarter.
“Growth in the second half of 2024 will be driven by domestic spending with continued strong support from external demand,” said BNM governor Abdul Rasheed Ghaffour.
Manageable inflation
Meanwhile, headline and core inflation averaged 1.8% in the first half of 2024.
Both headline and core inflation edged higher to 1.9%, from 1.7% and 1.8%, respectively, in the last quarter.
This was largely driven by higher housing and utilities inflation, which stood at 3.1%, compared to 2.6% in the previous quarter.
BNM said the headline and core inflation are expected to edge higher in the second half of the year mainly due to the rationalisation of diesel subsidies.
“However, the impact will remain manageable given mitigation measures by the government to minimise cost impact to businesses.
“For the rest of the year, upside risks to inflation depend on the extent of the spillover effects from further domestic policy measures on subsidies and price controls to broader price trends, as well as global commodity prices and financial market developments.
“Overall, headline and core inflation for the year are projected to remain within the forecast ranges of 2-3.5% and 2-3.% respectively.”
The percentage of Consumer Price Index items recording monthly price increases was higher at 49.4%, compared to 44.2% in the last quarter, in part because of price adjustments during the festive season and policy changes. – August 16, 2024.
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