KUALA LUMPUR (Aug 16): Malaysia’s economic growth accelerated faster than expected in the second quarter of 2024 (2Q2024), thanks to stronger household spending, business investments and exports.

Gross domestic product (GDP) grew 5.9% year-on-year in the April-June quarter, Bank Negara Malaysia (BNM) announced on Friday. The reading is higher than the median estimate of 5.8% growth in a Bloomberg survey, as well as the official flash estimate of 5.8% expansion.

On a seasonally adjusted basis, GDP rose 2.9% quarter-on-quarter. 

“Growth in the second half of 2024 will be driven by domestic spending, with continued strong support from external demand,” said BNM in a statement. 

On the demand side, private consumption rose 6%, while private investment climbed 12%, data showed. Public consumption gained 3.6%, while public investment was 9.1% higher. Net exports were up 3.4%. 

On the supply side, the services sector - which accounts for more than half of Malaysia’s economic output - expanded 5.9%, and manufacturing activity advanced 4.7%. Mining production edged up 2.7%, while the construction sector was 17.3% higher.

“With the strong performance in the first half, we are of the view that growth for the full year of 2024 could be closer to the upper end of the 4% to 5% range,” BNM governor Datuk Seri Abdul Rasheed Ghaffour said at a press conference on Friday, following release of the GDP data.

Household spending will remain the “anchor of growth” for the rest of 2024, with continued expansion in employment and income, as well as larger policy support, Abdul Rasheed said. Strong investment activities, amid ongoing multi-year projects and favourable financing conditions, will also support growth, he added.

Exports, meanwhile, are projected to expand further this year, driven by improving external demand, a global technology upcycle and higher tourist spending, the central bank governor said.

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