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KUALA LUMPUR: Malaysia’s economy saw a robust expansion of 5.9% in the second quarter of 2024 (2Q 2024), exceeding earlier prediction of 5.8%, bolstered by resilient household spending, vigorous investment activities and a significant boost in tourism arrivals. Bank Negara Malaysia (BNM) Governor Datuk Seri Abdul Rasheed Ghaffour said the central bank views Malaysia’s growth as on track to end the year near the upper end of the 4%-5% forecast range. The country’s economy expanded by 4.2% in 1Q 2024, bringing the first half’s growth to an average of 5.05%. The gross domestic product (GDP) grew by 2.9% in 2Q 2023. “The 5.9% GDP growth in 2Q 2024 is the highest since 4Q in 2022,” he said. In terms of sectoral performance, Abdul Rasheed noted the services sector expanded by 5.9% in 2Q 2024 compared to 4.8% in 1Q 2024, contributed by broad-based improvement in customer and business-related services. The manufacturing sector increased by 4.7% in 2Q 2024 after recording an expansion of 1.9% in the previous quarter, driven by higher growth across export and domestic-oriented industries,” he said. On agriculture, Abdul Rasheed said the sector expanded to 7.2% in 2Q 2024 versus 1.7% in 1Q 2024, contributed by stronger production in the oil palm and fisheries subsector, while the construction sector recorded better growth of 17.3% in 2Q 2024 compared to 11.9% in 1Q 2024. This is supported by higher activities, particularly in the civil engineering and special trade subsectors. He added that the mining sector showed moderate growth of 2.7% after recording 5.7% in 1Q 2024, due to lower growth in the oil and gas subsector following production disruption in May. In a statement, Abdul Rasheed said growth in the second half of 2024 (2H 2024) will be driven by domestic spending with continued strong support from external demand. On the domestic front, BNM noted household spending will be underpinned by continued employment, wage growth and policy measures. The central bank said investment activities will be driven by progress in multi-year projects across private and public sectors. Catalytic initiatives announced in national master plans and the higher realisation of approved investments are also key drivers for investment activities. Externally, BNM opined that the ongoing global tech upcycle and continued strong demand for non-electrical and electronics goods will lift exports. It said that improvement in tourist arrivals and spending are expected to continue. BNM said upside risks to growth include greater spillover from the tech upcycle, robust tourism activities and foster implementation of existing and new investment projects. “Downside risks to Malaysia’s growth prospects stem from a downturn in external demand, an escalation in geopolitical conflicts and lower-than-expected commodity production,” it added. — BERNAMA

KUALA LUMPUR: Airbus is on track to deliver a backlog of 400 commercial aircraft comprising single-aisle and wide-body models to Malaysia within the contractual schedule. According to Airbus Executive Vice President International, Wouter van Wersch, Airbus has a global backlog of 8,500 aircraft and plans to produce 770 aircraft of all types in 2024. “At the same time, we are also working with our suppliers closely to mitigate and meet our scheduled wrap-up goals,” he said at a media roundtable with Airbus. Airbus said aircraft production was cut by 40% from 863 units in 2019 due to the Covid-19 pandemic but has steadily risen since, with production levels at 566 aircraft in 2020, 611 in 2021, 661 in 2022 and 735 in 2023. The plane manufacturer plans to ramp up production for its commercial aircraft, specifically a total of 14 for the A220 in 2026, 75 a month in 2027 for the A320 family and raise the production rate to 12 a month for the A350 passenger aircraft in 2028. “The pandemic was a big interruption (for us). We reduced production by 40% but we are (now) working to ramp up and increase our production rates. So that’s very positive,” van Wersch said. Demand has risen tremendously post-pandemic, with the recovery being driven by the Asia Pacific region, especially Malaysia, due to its strategic location in ASEAN. “We have a large supplier base in (Malaysia). We work with 14 companies, including Composites Technology Research Malaysia (CTRM), Spirit Aerosystems Malaysia Sdn Bhd and SME Aerospace Sdn Bhd,” he said, adding that the Malaysian supply chain is valued at about US$350 million per year. Currently, Airbus has over 280 commercial aircraft in service with Malaysian carriers, nearly 100 civil and military helicopters, 4 military transport aircraft and 2 satellites supporting national defence and development. Airbus aims to build new partnerships in sustainability as it sees significant potential for Malaysia to be a key source of feedstock in the region to produce sustainable aviation fuel (SAF), van Wersch said. “Current feedstocks being studied include sources such as algae oil and seaweed. We are also working on a wide range of projects in Malaysia, especially with the Aerospace Malaysia Innovation Centre to define potential opportunities in developing and enhancing decarbonisation,” he added. The company is also taking the lead to ensure a sustainable future for the industry based on several pillars, including replacing older aircraft with the latest generation, increasing production and use of SAF as well as ultimately introducing new energy sources such as hydrogen. — BERNAMA

JOHOR BAHRU: Malaysia must enhance its economic foundation and strengthen its resilience to shield the nation from the ripple effects of external forces, including geopolitical tensions. Prime Minister Datuk Seri Anwar Ibrahim said the government’s MADANI Economic Framework is carefully designed to ensure the smooth execution of its plans, but some exposure to global factors remains unavoidable. “We couldn’t have predicted the geopolitical shifts in the Middle East or the political changes unfolding worldwide. “That’s why reinforcing our domestic and internal strength is critical. This is our top priority and it’s essential that the people understand this,” Anwar said. He emphasised that building internal resilience requires commitment from leaders, civil servants, the private sector and the public. “If we have a strong domestic foundation, the impact from external pressures will be more manageable,” he said during a dialogue and forum on ‘A Year of MADANI Economic Achievements’ at the Southern Zone MADANI Rakyat 2024 programme. Anwar, who is also the Finance Minister, highlighted that the ongoing efforts to strengthen the economy resulted in an economic growth 5.9% in the second quarter of 2024 (2Q 2024), surpassing earlier forecasts. On the subject of targeted diesel subsidies, Anwar stressed that measure was implemented by the government to prevent leakage in government funds which have also benefited the rich as well as foreign nationals. He said the move was in line with the government’s efforts to reduce leakage of subsidies which have cost the government billions of ringgit and put a stop to diesel smuggling. “When we enforce the targeted diesel subsidies, people get upset. But the government must be responsible and do what is necessary. “If there are additional measures to ease the burden on the people, we will implement them. For instance, there are those who are entitled to RM200 but have not received it, so they must register with the Subsidised Diesel Control System (SKSD2.0) and we will ensure that they get it,” Anwar said. In his speech, the Prime Minister highlighted that Malaysia’s economic performance in 2Q 2024 had exceeded projections, driven by various initiatives and agendas implemented by the government under the MADANI Economic Framework. “All of this has bolstered investor confidence and as a result, the ringgit has become one of the strongest currencies in our region,” he added. — BERNAMA