Kenanga Research has maintained its third-quarter 2024 (3Q24) gross domestic product (GDP) growth forecast at 5.3%, with full-year growth projected to reach 5%. The growth outlook is primarily supported by the continued expansion of the manufacturing sector, alongside an unexpected boost from the construction sector, despite signs of a slowdown in mining and domestic demand.
The official 3Q24 GDP data is expected to be released by the Statistics Department this Friday, with growth anticipated to be 5.3%, following a 5.9% GDP growth in 2Q24. This represents an improvement from 4.2% in 1Q24, driven by stronger private consumption and a recovery in exports amid a global tech upcycle.
Kenanga Research noted that the manufacturing sector is set to continue its expansion, marking the fourth consecutive quarter of growth. The manufacturing output index is expected to rise to 5.8% in 3Q24, up from 4.9% in 2Q24, supported by strong performance in export-oriented industries, particularly the electrical and electronics subsector.
The research house also projected that GDP growth will moderate to 4.6% in the final quarter of 2024, bringing the overall annual growth to 5%, within the Finance Ministry’s forecast range of 4.8% to 5.3%.
However, Kenanga Research highlighted that the economic outlook remains vulnerable to external risks, including potential slowdowns in advanced economies due to the delayed effects of higher interest rates and rising geopolitical tensions affecting global supply chains. Additionally, a slower-than-expected recovery in China despite ongoing stimulus measures is a concern.
Meanwhile, Hong Leong Investment Bank (HLIB) Research has also maintained its 3Q24 GDP growth forecast of 5.3%, with expansion expected to be driven by the manufacturing and services sectors. HLIB Research has kept its 2024 GDP forecast unchanged at 5% year-on-year.
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