Malaysia’s economy remains resilient – expected to expand further

The economy saw a significant increase in Q1 2022, when the country lifted most virus prohibitions

The International Monetary Fund (IMF) expects Malaysia’s economy to grow by 5.75 percent in 2022, owing to pent-up domestic demand and maintained robust external demand, according to TheStar.

This corresponds to the government’s 2022 growth forecast of 5.3 percent to 6.3 percent. Last year, the GDP grew by 3.1 percent.

More: Malaysia’s GDP to experience 6% growth: OECD

The steady recovery of Malaysia’s economy can be attributed to the increase in commodity prices and central bankers tightening monetary policy to fight increasing inflation, according to Finance Minister Zafrul Aziz.

He told Bloomberg Television’s Haslinda Amin at the World Economic Forum in Davos, Switzerland that “Our interest rate has gone up by 25 basis points mainly because of the strength of the economy. I think we are able to increase it without having much adverse impact on the economy because of where we are.”

The economy saw a significant increase in Q1 2022, when the country lifted most virus prohibitions, giving the central bank leeway to raise borrowing charges to prevent inflation, despite the fact that consumer prices are rising at the slowest rate in Southeast Asia.

According to a Bloomberg survey, the central bank may raise the benchmark policy rate again in Q3 2022. This is seconded by the Department of Statistics Malaysia (DoSM), where it pointed out that the country’s economy will remain resilient, despite external risks and downward pressure following a favourable performance during the first quarter.

Datuk Seri Dr. Mohd Uzir Mahidin, chief statistician, stated that economic recovery is underway despite several ongoing global crises disrupting the supply chain, inflationary pressure, and tightening monetary policies.

“Malaysia’s growth is projected to be solid in the medium term, although risks of long-term economic scarring are real,” the IMF’s executive board concluded following consultations with Malaysian officials in an assessment report released last April.

The Property Report editors wrote this article. For more information, email: [email protected].