PETALING JAYA: Hong Leong Bank Bhd expects Malaysia’s gross domestic product (GDP) to grow around 4.5% in 2024, with the ringgit projected to close between RM4.50 and RM4.55 against the US dollar by year-end.
Recently, the Department of Statistics Malaysia stated that the local economy moderated to 3.8% in 2023.
According to regional wealth management (wealth products and specialists) head Jason Liew Yik Kee, the GDP growth is expected to be driven by improved inflow of foreign direct investment, tourism as well as expanded spending in infrastructure.
“There are a lot of things going for us with our cheap currency, our tourism industry is (on the upward trend as well as) our infrastructure spending is going to pick up. The government has given direction for a lot more local spending to be had as compared to the previous years,” said Liew, adding that Malaysia is anticipated to likely experience a positive year in 2024.
Meanwhile, regional wealth management team lead (investment research and advisory) Ramone Mikgail Kok said that the tourism industry is projected to improve through promotional efforts by the government such as the Visa-free entry for China and India citizens visiting Malaysia programme.
“We foresee that tourism in Malaysia will pick. Talking about multiple visa entries for China and Indian tourists, among the most populous nations in the world, definitely that is going to help,” he told reporters after the Hong Leong Bank Wealth Symposium recently.
Touching on the ringgit, Liew foresees that the local currency will strengthen against the greenback between RM4.50 and RM4.55 by year-end, supported by projections of a softer US dollar amid expectations of rate cuts this year by the US Federal Reserve.
He said the bank holds a conservative stance, whereby it expects that the US Fed will announce rate cuts of up to three times this year.
“In general, (we expect for) the majority of Asian currencies to appreciate against the US dollar. As the US is trying to tackle inflation in its country, it will have to cut rates, however inflation is not such a big problem here in this part of the world ... inflation has generally been controlled,” he opined.
If the US Fed undergoes its rate-cutting cycle and try to decelerate its growth, the greenback is expected to weaken. At the same time, Asia’s growth is anticipated to improve against the US.
“In this part of the world, a lot of countries are still focused more on growth. Based on our research, (some) of the Asian countries’ growth charts are much higher as compared to the US,” he added.
On additional growth sectors, Kok said that the electrical and electronics industry will thrive as well as consumerism and utilities, particularly renewable energy.
“We do think that there is a runway for the utilities sector given that the National Energy Transition Roadmap will be a very positive tailwind for this sector in the next few year,” he added.
Source: The Sun Daily
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