malaysiang
KUALA LUMPUR, MIDF Amanah Investment Bank Bhd is maintaining its industrial production index (IPI) growth forecast at 4.2 per cent this year (2023: +0.7 per cent) as production activities strengthened in the second quarter of 2024 (2Q 2024).
In a note, MIDF Amanah expects external demand to recover, supporting higher production of various export products, including electric and electronic (EandE) products.
Production of domestic-oriented products will also rise with growing domestic consumption, the investment bank said.
MIDF is nevertheless concerned about higher inflation hurting consumer sentiment and spending plans, together with other downside risks.
‘The external sector could simultaneously be hit by a significant drop in overseas demand, given recent concerns over weak growth in China and a US recession. We are also monitoring the ongoing geopolitical conflicts which could disrupt world trade flow and the global supply chain,’ it said.
According to the Statistics Department Malaysia (DoSM), Malay
sia’s IPI rose by five per cent year-on-year in June 2024, sustaining a positive momentum for six consecutive months, driven by consistent manufacturing sector growth.
Manufacturing grew by 5.2 per cent (May 2024: 4.6 per cent), with a 4.9 per cent turnaround in the mining sector production (May 2024: -6.9 per cent) and 3.5 per cent growth in the electricity sector (May 2024: 4.5 per cent).
Hong Leong Investment Bank Bhd opined that the global manufacturing purchasing managers index (PMI) contracted to 49.7 in July 2024 (June: 50.8), amid a decline in new orders and supply chain disruptions.
‘Despite the setback, we continue to expect Malaysia’s manufacturing activity to remain expansionary, benefiting from a low base effect and sustained growth in domestic-oriented production amid a continued rise in domestic spending,’ it said.
Meanwhile, Public Investment Bank Bhd projected that Malaysia’s goods and services exports to grow by 5.4 year-on-year in 2024, underpinned by a recovery in global demand and a r
obust electronics sector.
Concurrently, global gross domestic product (GDP) growth is expected to reach 3.0 per cent in 2024, providing a supportive external environment.
‘Malaysia’s high trade openness, as reflected in a merchandise trade-to-GDP ratio of 144.7 per cent in 2023, underscores its vulnerability to global economic cycles, making these projections critical to the country’s economic trajectory,’ it added.
Source: BERNAMA News Agency
