In a statement, the research house said it anticipates an improvement in electrical and electronics exports, coupled with growing external demand from major markets like China and the US.

“Moreover, we expect economic growth this year to continue to be anchored by a sustained rise in domestic spending, backed by a healthy labour market, rising income, and continued recovery in tourist arrivals as well as spending,” it said.

Nevertheless, MIDF remained cautious that external developments like slower growth in China, possible recession risks in the US, and disruption to global trade from intensified geopolitical tensions could be the downside risks to Malaysia’s growth prospects in 2024.

“On the domestic front, we opine that the possible upward price pressures may result in constraining consumers’ purchasing power and their spending,” it added.

Meanwhile, in a separate note, OCBC Global Markets Research projected that Malaysia’s GDP would register a 4.2% growth this year on the back of a cautiously optimistic outlook.

“We expect more visible support to GDP growth from private sector consumption and investment spending.

“The recent pickup in capital goods imports in November and December 2023 is encouraging in this regard,” it stated.

Additionally, the research house said it expected a bottoming out of the electronics export downcycle, likely in the second half of 2024, which would help mitigate downside risks to export growth.