BERNAMA – HSBC has forecast Malaysia’s gross domestic product (GDP) growth at 4.5 per cent for 2024, slightly above consensus with an upside risk.
Its co-head of Global Research Asia and chief Asia economist Frederic Neumann said the forecast was supported by the country’s robust economic performance and the incoming inflows of foreign investments.
“We also expect a pickup in trade over the second half (H2) of this year, benefitting mainly from consumer electronics,” he said in the HSBC H2 2024 Asian Outlook webinar yesterday.
Neumann said Southeast Asian countries, including Malaysia, have continued to perform well in their economies, with no sign of financial stress despite rising interest rates. He also noted that Malaysia’s exports were doing quite well, which was surprising given the global backdrop of weaker growth.
“Besides, the GDP forecast will also be bolstered by the gradual turnaround in the trade cycle and an additional boost from the tourism sector.
“With the global demand from consumers for electronics accelerating notably, this should also help countries in ASEAN, particularly Malaysia and Vietnam. We remain quite positive on trade going forward,” he said.
HSBC has forecast Asia’s economy to grow 4.9 per cent for the full year of 2024.
Neumann said HSBC believes that the US Federal Reserve cutting interest rate will occur this September, which will be a shallow easing cycle for most central banks in the region.
It also maintained its view that Bank Negara Malaysia is likely to hold its policy rate at 3.0 per cent in 2024, and recently, it removed its call of a 25 basis point rate cut in the first quarter (Q1) of 2025.
“For Malaysia, the possibility of a rate hike is higher than a rate cut, although neither is our central case,” he said.
Meanwhile, HSBC head of Asian FX Research Joey Chew said the ringgit has been an outperformer and has been trading stable since February this year, although other Asian currencies continue to weaken against the US dollar.
