HSBC Global Research has reaffirmed its economic outlook for Malaysia, maintaining a GDP growth forecast of 4.5% despite recognising potential upward risks stemming from increased foreign investments and a projected recovery in trade dynamics in the latter half of 2024.

Speaking at a virtual briefing on HSBC's Asian outlook for the second half of 2024, chief Asia economist Frederic Neumann highlighted Malaysia's robust economic performance as a factor supporting the optimistic forecast.

He noted that the country's current economic momentum, bolstered by substantial foreign investments, could potentially exceed the projected growth rate.

HSBC's GDP forecast aligns closely with Malaysia's central bank, Bank Negara Malaysia, which anticipates economic growth between 4% and 5% for the year. This outlook reflects an improvement from the 3.7% growth registered in 2023.

Recent data from 's Department of Statistics Malaysia indicated a strong year-on-year growth of 5.8% in the second quarter, driven by robust consumer spending and export activities, marking the sharpest increase in six quarters. The first quarter had also seen a solid growth rate of 4.2% year-on-year.

Addressing currency dynamics, HSBC's head of Asia foreign exchange research, Joey Chew, expressed confidence in the stability of the Malaysian ringgit against the US dollar for the remainder of 2024.

Despite expectations of a rate cut by the US Federal Reserve, Chew cited the ringgit's resilient performance in recent months and anticipates it to hover around 4.68 against the greenback by year-end.

The ringgit has demonstrated resilience, appreciating by 2.7% from its lowest point in February to its current trading level of 4.6750 against the US dollar.

HSBC's comprehensive assessment underscores Malaysia's economic resilience and potential for growth amidst global economic uncertainties, providing stakeholders with a positive outlook for the country's economic trajectory in the coming months.