Malaysia's Economic Performance in 1Q24: A Strong Start

In 1Q24, Malaysia’s economy grew by +4.2% yoy, driven by services and manufacturing, improved household spending, and robust domestic investment and consumption. It shows that Malaysia is enjoying a strong economic performance, a strong start to 2024~

Here’s a detailed analyst’s view of the country’s recent economic performance.

Real GDP Growth

1Q24 Real GDP: Expanded by +4.2% yoy, up from 4Q23’s +2.9% yoy.
Quarterly Increase: +1.4% qoq, compared to 4Q23’s +1.0% qoq.
Key Drivers: Services and manufacturing sectors, household final consumption expenditure, and gross fixed capital formation.

Household Spending and Employment

Growth by Month: +4.8% yoy in January, +5.0% yoy in February, and easing to +2.9% yoy in March.
Unemployment Rate: Improved to 3.3% from 3.6% in 4Q23.
Contributors: Festive seasons, new school sessions, government incentives, and increased tourist arrivals.

Sectoral Economic Performance

Services Sector

Growth: +4.7% yoy and +1.2% qoq in 1Q24.
Sub-Sectors: Wholesale & retail trade (+3.8% yoy), transportation & storage (+11.0% yoy), business services (+8.4% yoy), finance and insurance (+0.1% yoy).

Manufacturing Sector

Rebound: +1.9% yoy in 1Q24 from a -0.3% yoy contraction in 4Q23.
Sub-Sectors: Non-metallic mineral products, basic metal, and fabricated metal products (+7.2% yoy), petroleum, chemical, rubber, and plastic products (+1.1% yoy).

Construction Sector

Impressive Growth: +11.6% yoy and +8.3% qoq in 1Q24.
Key Drivers: Civil Engineering (+23.5% yoy), Specialised Construction Activities (+11.4% yoy), Residential Buildings (+8.0% yoy), Non-residential Buildings (+1.6% yoy).

Mining and Quarrying Sector

Growth: +5.7% yoy and +2.2% qoq.
Sub-Sectors: Natural gas (+9.0% yoy), Crude and Condensate (+1.3% yoy).

Agriculture Sector

Slowdown: +1.6% yoy and -0.3% qoq.
Sub-Sectors: Livestock (+4.5% yoy), Fishing (+3.5% yoy), Oil Palm (+2.5% yoy).

Aggregate Demand Performance

Consumption adds to strong economic performance

Final Consumption: Expanded +5.1% yoy and +0.6% qoq.
Private Consumption: +4.7% yoy and +0.5% qoq.
Government Consumption: +7.3% yoy and +1.5% qoq.

Gross Fixed Capital Formation (GFCF)

Growth: +9.6% yoy and +3.2% qoq.
Sub-Segments: Structure (+10.7% yoy), Machinery & equipment (+9.2% yoy).

Italian Airports – Wikipedia Strong economic performance

External Trade

Recovery: Gross exports grew by 2.2% yoy, gross imports by 13.1% yoy.
Trade Partners: Improved exports to ASEAN (+1.1% yoy) and the US (+8% yoy).

Economic Outlook

Positive Growth Forecast: Full-year GDP forecasted at +4.1% yoy for 2024.
Drivers: Robust domestic expenditure, recovery in external demand, steady employment, wage growth, government policies, and inbound tourism.
Investment Activities: Boosted by multi-year projects and strategic initiatives under NIMP 2030.

Inflation and Currency

Inflation: Headline inflation at +1.7% yoy in 1Q24, expected to grow to +3.2% yoy in 2024.
MYR Depreciation: -2.9% yoy against the USD, with expected recovery by year-end.
OPR Rate: Central bank maintained OPR at 3.0%, expected to remain unchanged throughout 2024.

Malaysia’s economy showed strong growth in 1Q24, driven by the services and manufacturing sectors, improved household spending, and stable employment. With a positive outlook for the rest of the year, continued investment and robust domestic expenditure are expected to sustain economic momentum. Inflation and currency fluctuations remain moderate, with stable policy rates anticipated.