The Malaysian economy grew 5.8% in Q2, the fastest in six quarters

KUALA LUMPUR – Malaysia’s economy expanded at its fastest pace in six quarters, suggesting the recovery seen earlier this year is gathering pace.

Gross domestic product grew 5.8 percent in the April-June quarter a year ago, the fastest since the December quarter of 2022 and faster than the top estimate of 5.1 percent in a Bloomberg survey. The performance follows a 4.2 percent expansion seen in the three months to 2024.

The US$400 billion (S$537 billion) economy, which expanded at the region’s fastest pace of 8.7 percent in 2022, saw growth last year amid subdued global demand. The International Monetary Fund expects economic output to improve to 4.4 percent this year from 3.7 percent in 2023.

As Prime Minister Anwar Ibrahim positions Malaysia as a regional technology hub, the country has recently attracted billions of dollars in investment pledges from companies such as Google and Microsoft. At the same time, exports grew for the third consecutive month in June and are set to improve further on the back of global technological progress, the central bank said. A cash handout and higher wages for government employees will support domestic consumption.

Malaysia is set to benefit from a „trifecta of positives” this year – private investment, recovering external demand and improving flexible consumer spending, Maybank investment banking analysts Suhaimy Elias and Wong Chew Han said in a note due on July 15. Information. They expect his annual growth to be 4.7 percent.

However, an uneven or slow recovery in China – Malaysia’s largest trading partner – could cloud the outlook for the Southeast Asian country, which relies on Chinese tourists and investment to support economic activity.

Bank Negara Malaysia expects external demand to improve by 4 percent to 5 percent of GDP this year. Bloomberg