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Demand slump hampers Malaysia’s economic growth

RAM Rating Services Bhd (RAM Ratings) forecast that the Malaysian economy possibly faces formidable challenges in the remaining months of this year amidst soft global demand and other headwinds.
Demand slump hampers Malaysia’s economic growth ảnh 1A corner of Kuala Lumpur, Malaysia. (Photo: themalaysianreserve)
Kula Lumpur (VNA) – RAM Rating Services Bhd (RAM Ratings)forecast that the Malaysian economy possibly faces formidable challenges in theremaining months of this year amidst soft global demand and other headwinds.

The rating agency anticipated Malaysia’s economic momentum to grow slower at4-5% in 2023 from 8.7% last year.

The country’s gross domestic product (GDP) during January - June decelerated to4.2% year-on-year as global trade eased off. Exports declined 6.4% year-on-yearin volume in the period.

Domestic demand, the key driver of economic growth, was also softer at 4.5%, comparedto 9.9% recorded in the second half of 2022, it said.

A spike in global food and commodity prices due to supply distortion bygeopolitics and/or tariffs would be a key downside risk that could inflatedomestic prices, and hinder local consumption demand.

Falling global demand, aggravated in particular by China’s property crisis,could crimp Malaysia’s export growth.

However, RAM Ratings expected Malaysia’s economy to record a positive growth of 4.5% to5.5% in 2024 thanks to robust labour market, increasing domestic demand, andimproved export./.
VNA
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