Economic Focus: Riding on resilient consumer spending

14 May 2024


  • Malaysia’s economic activity remains supported by resilient domestic demand. Sustained consumer spending amid revival of tourism industry and strong investment activities are expected to bolster growth momentum.
  • Robust employment market with record high labour participation rate continues to underpin steady growth in the Services sector.
  • Weakness in external trade has bottomed out. We believe the Manufacturing sector is set to benefit from stronger external demand.
Sustained domestic demand in Malaysia
  • Malaysia’s economy grew 3.9% y-o-y in 1Q24 (based on advance estimates), supported by the Service sector.
  • The Services sector, accounting for 59% of the economy, is expected to remain healthy in 2024, driven by healthy household spending as employment continue to increase amid a robust labour market.
  • The implementation of major projects in Budget 2024 and catalytic developments under various national policy blueprints will underpin strong investment spending.
Manufacturing sector to benefit from external demand recovery
  • Malaysia’s exports recorded its recent low in April 2023.  Since then, exports have gradually improved.
  • This is broadly consistent witht the gradual improvement for key Asian exporters.
  • Malaysia is likely to benefit from the global technology upcycle given its position in the semiconductor industry.
Regional Highlights
  • The below highlights some of the recent interesting DBS regional reports. Please click on the link to read the detailed report.
  • Growth resilience in the face of high interest rates and geopolitical uncertainty has been a feature of the global economy during the past couple of years. Looking at high frequency data available so far, as well as leading indicators, DBS expects this trend to continue through 2Q24. (From Macro Insights Weekly: Global growth looks good for 2Q24)
  • Global fixed income markets have been volatile as the 2024 US rate cut scenario is priced in and out. How does the inflation and labour market developments align with two rate cuts in 2H24? Read this report for DBS' view on the US rate cut scenarios. (From Macro Insights Weekly: A year without rate cuts?)