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ANZ analysts note that Malaysia’s Q2 economic activity produced a positive surprise for the second straight quarter.

Key Quotes

“We remain concerned about the underlying momentum.”

“Of particular note is the flat export performance, which alongside compressed public infrastructure spending, remains a drag on overall investment activity. Indeed, the stronger positive contribution to growth from net trade was due to a sharper contraction in imports rather than a recovery in exports.”

“Admittedly, private consumption held up better than expected despite headwinds faced by households.”

“Going forward, the revival of select infrastructure projects will provide some support to investment. Nonetheless, exports are key to a more significant upturn, the outlook for which remains clouded amid persistent trade tensions.”