HLB: M’sia’s economy to grow better at 4.5 per cent
KUALA LUMPUR: Malaysia’s economy is expected to grow better at 4.5 per cent this year amid global economic challenges, said Hong Leong Bank Bhd (HLB).
The bank’s regional wealth management team lead (investment research and advisory) Ramone Mikgail Kok said the growth would likely be fuelled by an increase in foreign direct investment, growing tourism, and heightened infrastructure spending.
He also said the tourism sector would see a gradual pick up this year as Malaysia has allowed visa-free entry to citizens from China, India, and several Middle Eastern countries starting December last year, which would help cushion the impact of weaker exports.
“Definitely, that is going to help,” he told reporters after the Hong Leong Bank Wealth Symposium here during the weekend.
On the ringgit performance, the local currency is anticipated to stabilise against the US dollar at between RM4.50 and RM4.55 by the end of the year, driven by expectations of a softer greenback and the rate-cutting cycle in 2024 by the United States (US) Federal Reserve (Fed).
HLB’s wealth products head and specialist Jason Liew Yik Kee said the firmer ringgit would track similar trends among regional peer currencies, along with the potential resurgence of the second largest global economy, China, and the attractiveness of its stock valuations in 2024.
“The main thing is how aggressively the Fed cut rates as the market is pricing in six times of cuts.
“Asian currencies will also appreciate against the US dollar because they (the Fed) are trying to tackle inflation in the US.
“So, they will definitely have to cut rates.
“We maintain our view for the US rate cuts in the mid-second half of this year, while the market will see the weakening of the greenback,” he said.
At 6pm Friday, the ringgit closed stronger at 4.7275/7325 against the greenback. — Bernama