KUALA LUMPUR: Malaysia continues to deliver a strong economic outturn, despite the gross domestic product moderating to 5.3 per cent in the third quarter of 2024, with the trajectory expected to continue throughout the year, economists said.

This matched the consensus polled by Reuters, which had forecast a growth of 5.3 per cent in the July-to-September period, down from 5.9 per cent in the previous quarter.

IDEAS Malaysia economist and assistant research manager Doris Liew said Malaysia's robust economic growth in Q3, although slightly moderated from the previous quarter, remains well above the 5.0 per cent mark.

Liew said this will likely continue throughout the year, fuelled by the semiconductor industry's sustained recovery and expected increases in consumer spending during the holiday season and following the December civil servant pay hike.

"Additionally, ongoing investment activities and export expansion will further solidify Malaysia's growth momentum into 2025," she told Business Times.

However, Liew said potential shifts in the US economic policies under a new administration could introduce risks to Malaysia's economy, particularly its semiconductor industry.

"While potential tariffs and protectionist measures could impact global manufacturing trends, the unpredictability of such policies makes it challenging to gauge their exact impact," she added.

Universiti Kuala Lumpur Business School economic analyst Associate Professor Aimi Zulhazmi Abdul Rashid said on the cumulative basis, the Malaysian economy is averaging at 5.2 per cent for the three quarters under review.

This is within the recently-revised projection by the government of between 4.8 per cent and 5.3 per cent, after a strong growth in Q1 and Q2 pushing a revised growth projection.

"Even though the Q3 is smaller than 5.9 per cent of Q2, it still augurs well for the overall growth target for 2025.

"Nevertheless, the market is expecting challenging global conditions next year when Donald Trump returns to office with the intention to enforce American interest first. The US dollar has been strengthening since the end of the election, acknowledging Trump action plans will immediately be executed," he said.

Putra Business School economic analyst Associate Prof Dr Ahmed Razman Abdul Latiff said Malaysia is on track to achieve its annual GDP target, with just a minimum 4.0 per cent growth needed in Q4 2024.

He believes this is achievable, despite the risk posted by Trump's recent victory in the US presidential election.

"The impact will only materialise next year when Trump starts his presidency and announces the new policies. So we have to wait first for the announcement," he said.

Economists, meanwhile, said both headline and core inflation remain unchanged at 1.9 per cent in Q3 2024, suggesting limited spillovers from the recent diesel price adjustment to broader consumer price index (CPI) prices.

Higher inflation was observed for diesel and vehicle insurance, which was offset by broader moderation in inflation for food and beverages, particularly food away from home, cereals, and fresh vegetables.

On the whole, the share of CPI items recording monthly price increases was lower at 38.9 per cent during the quarter from 49.4 per cent in Q2 2024.

https://www.nst.com.my/business/economy/2024/11/1135144/malaysias-economy-grows-53pc-q3