AM Bank Group (AMBank) foresees a slightly slower quarter three 2024 (3Q2024) gross domestic product (GDP) growth at 5.1% year-on-year, down from the advanced estimate of 5.3%.
“After considering the latest statistical data, our latest number reflects a slight variance from our initial estimate of 5.0%. This supports our earlier view that the 3Q figure still hovers around 5.0% level after reaching its peak growth in the previous quarter as the low base effect dissipates,” said AMBank in the recent report.
Should this materialise, Malaysia’s growth for the first nine months this year would be at 5.1%, which remains on the path to achieving the official full-year projection range of 4.8% to 5.3% as recently upgraded in the Budget 2025 announcement last month.
“We opine that the dynamic growth is supported by household consumption amid a robust labour market, evidenced by the easing of the unemployment rate to the pre-pandemic level of 3.2%, aligning with our year-end forecast,” said AMBank.
On the supply side, the services sector continued to drive the economic momentum during the quarter. However, AMBank’s projection pointed to a moderation of 5.2% y/y, which they believe is due to a lack of festive season spending.
Be that as it may, growth in the manufacturing sector accelerated during the said quarter amid steady output in the export-oriented segments, likely benefiting from the inventory front-loading ahead of the potential tariffs from the US.
“We posit that 4Q2024 growth will moderate further amid headwinds posed by uncertainties in global development, which could undermine consumer and business sentiment. Our 2024 GDP projection remains at 4.9%, which seems feasible as it aligns with the official estimates,” said AMBank. —Nov 12, 2024
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