KUALA LUMPUR (June 29): While Malaysia’s growth momentum is expected to continue into the remaining quarters of this year, key global events will be keenly watched as they could affect the nation’s growth path.

Much rests on policy easing by the US Federal Reserve, whose decision to keep interest rates higher for longer threatens to exacerbate capital outflows and weigh on the ringgit. Then there is the risk of a moderation in global growth which may impact Malaysia’s export performance and thus hurt its economy.

Apart from the external demand pull that could drive a better second half, eyes are on domestic private consumption, which accounts for about 60% of gross domestic product, to ascertain if it will be derailed by the soon-to-be implemented fuel subsidy rationalisation or the expected uptick in consumer price inflation.

Also, political will to follow through on the domestic reform agenda, such as the ongoing fuel subsidy rationalisation, tax mobilisation, spending efficiency, reduced leakages and fiscal prudence, is being scrutinised.

Over in the equity market, having outperformed in the first half, the local bourse has entered a season of consolidation before another anticipated rally in the second half.

That said, continued interest in thematic plays centring on artificial intelligence, data centres and key infrastructural developments is expected to maintain the equity market momentum.

Read on to learn what heads of research think will spur the market to greater heights amid the confluence of internal and external forces.

In an accompanying story, we have done a half-year review of stock picks by The Edge, fund managers and heads of research.

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