Bank Negara Malaysia is expected to possibly lower the Overnight Policy Rate (OPR) in the first half of this year due to wanting to lower the inflation rate to the targeted level.
According to the CEO and Founder of Irhamy Valuers International, Irhamy Ahmad said inflation was the biggest challenge last year. However, Bank Negara Malaysia (BNM) and the government's fiscal constraints acted well to bring inflation down to the target range.
He also said, we may see a decrease in OPR in the first half of 2024 and will help stimulate the local economy.
Analysts estimate that Malaysia's Gross Domestic Product (GDP) will increase from 4.0% in 2023 to 4.3% this year.
The estimate is in line with the latest growth forecast of between 4.0% and 5.0% made by the Ministry of Finance.
He further explained that one of the factors driving Malaysia's economic growth this year is the expected recovery that will occur in the tourism sector.
It is because the sector has brought about many positive changes and job opportunities. This can help strengthen the economy and benefit many households in the local community.
As the tourism sector has recovered from the pandemic problems of the past few years, the industry will contribute 14% to GDP in 2022 compared to 19.5% in 2019, the year before the pandemic.
In addition, Malaysia's economy also depends on both domestic demand and exports.
In 2024, Malaysia will record higher exports than in 2023 with a gradual increase throughout the year.
The increase in Malaysian exports will be driven by stronger demand from North America and the Eurozone. The World Trade Organization (WTO) projects that world trade volume will increase by 3.3 percent this year. If major economies overcome inflation and cut interest rates earlier than expected, exports will grow faster.
