Malaysia’s economy likely grew at the fastest pace in 18 months in Q2 due to a robust rebound in exports and elevated household consumption.

This is according to a Reuters survey of economists carried out this month.

Indeed, the poll conducted between 7-13 August among 20 economists forecast that Southeast Asia's third-largest economy grew by 5.8% in the second quarter, consistent with the preliminary estimates released in July. 

This growth rate was measured against the same quarter from the previous year.

This would signal the fastest economic growth since Q4 2022, with predictions for the upcoming data release on 16 August varying between 5.0% and 6.8%.

“A downturn in exports, especially those for technology and electronics products that Malaysia has been suffering since last year and into the early part of this year, seems to be bottoming out and ... we're starting to get that pick up into the second quarter of this year,” stated senior regional economist at Barclays, Brian Tan.

Exports increased by 9.1% in April and 7.3% in May, but then slowed to a 1.7% rise in June compared to the same months the year before. 

According to government data, exports overall grew by 3.9% during the first half of this year.

Malaysian exports, which are significantly dependent on demand from China, are expected to see an uplift due to the revitalised economic relations between the two countries. 

“We continue to hold an optimistic view on Malaysia's cyclical growth outlook and will watch for investment trends, given increased investors' interest, especially on the foreign direct investment front,” said DBS economist Chua Han Teng.

In addition, a separate Reuters poll revealed that economic growth in 2024 is projected to average 4.4%, aligning with Bank Negara Malaysia's forecast range of 4.0% to 5.0%.