Malaysia’s growth may be faster than expected, funds likely to continue pouring in — DBS
DBS Bank raised its 2024 growth forecast for Malaysia to 5.2% on July 24, up from its previous estimate and above the official range of 4% to 5%.
Source: The Edge Malaysia · July 24, 2026 at 11:17 AM · AI-assisted report
Corroborated
MALAYSIA, 24 JULY 2026 —
DBS Bank raised its 2024 growth forecast for Malaysia to 5.2% on July 24, up from its previous estimate and above the official range of 4% to 5%.
Market Impact
The upgrade follows first estimates that show the economy expanded 5.8% in the second quarter from a year earlier, defying geopolitical stress in the Middle East. Domestic spending and shipments of artificial-intelligence components and devices are cushioning the impact of lower commodity prices, DBS senior economist Chua Han Teng told reporters.
Malaysia’s net energy position gives it an edge over peers in South-East Asia that remain more exposed to commodity swings, Chua said. “This is a key differentiator when external shocks hit,” he told the Malaysian business desk.
The ringgit has held up better than most regional currencies in 2024 despite briefly weakening past the 4.00 level against the US dollar. Government bond yields across the curve have stayed relatively stable, and DBS expects the trend to continue.
Upside pressure on yields remains limited because inflation is close to its long-term average and fiscal buffers are intact, Chua noted. “Malaysia’s financial markets are signalling investor confidence in the economy’s solid domestic fundamentals, even as geopolitical risks in the Middle East linger,” he added.
Bank Negara Malaysia left its benchmark interest rate unchanged at 2.75% at its July policy review, saying the stance still supports resilient growth and tame inflation. The central bank has held the rate since cutting it by 25 basis points in July 2023.
Official projections released earlier put 2026 growth between 4.0% and 5.0% and average inflation at 1.5%–2.5%. DBS’s upward revision for 2024 suggests Malaysia’s expansion may exceed the upper end of this longer-term forecast.
For fund managers overweight Malaysian risk, the stronger-than-expected second-quarter print supports further inflows into local bonds, according to DBS. Chua cautioned that geopolitical risks in the Middle East persist, but said Malaysian assets continue to reflect confidence in the policy mix.
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