KUALA LUMPUR: Malaysia is poised to emerge as the second-fastest growing economy in Southeast Asia, after several financial institutions raised their growth forecasts.
HSBC Global Investment Research is the latest to turn more optimistic, upgrading its 2025 growth forecast for Malaysia from 4.2 per cent to 5 per cent, local media reported this week.
The bank highlighted Malaysia’s proactive efforts in diplomacy, particularly during the Association of Southeast Asian Nations (ASEAN) summit held in Kuala Lumpur in October, where the country’s neutrality helped bring major trading partners to the same table, the New Straits Times (NST) reported on Monday (Nov 17).
“Sentiment wise, there continues to be a revival of optimism,” HSBC said in a research note.
“Given the better-than-expected outturn, reduced trade uncertainty and domestic resilience, we are upgrading our gross domestic product (GDP) growth forecast to 5 per cent for 2025, from 4.2 per cent,” it added.
“This means Malaysia is likely to be ASEAN’s second-fastest growing economy, on a par with Indonesia and just after Vietnam.”
On Oct 28, HSBC raised its GDP growth forecast for Vietnam from 6.6 per cent to 7.9 per cent, according to news outlet VNE Express.
Earlier, in its Aug 6 report titled ‘ASEAN Perspectives: Domestic Resilience in focus for ASEAN’, the bank had projected Indonesia’s GDP growth at 4.5 per cent.
HSBC also highlighted that Malaysia’s reciprocal trade agreement with the United States could further support economic growth in the country by reducing trade uncertainty.
The bank also cited that tourism has fully recovered to 2019 levels in Malaysia.
“In particular, it (Malaysia) leads the region in welcoming Chinese tourists, exceeding 20 per cent of its 2019 level. This is supported by a visa-free scheme with China and increasing flight connectivity,” HSBC said.
“With next year’s ‘Visit Malaysia 2026’ campaign, the boost to the (tourism) sector is likely to be even bigger,” HSBC added.
https://www.channelnewsasia.com/asia/malaysia-asean-second-fastest-growing-economy-ringgit-5484101
