13th July 2022 - 3 min read
Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz has reassured that Malaysia is not at immediate risk of a recession, although the government is ready for any eventualities – including a global recession. He also reiterated that all countries in the world should be prepared for such a possibility.
“We have gone through global recessions before this, and we need to be sure that the government and people are also ready for any eventualities. But today, the focus is still very optimistic that the country will continue to record a positive growth this year,” said Tengku Zafrul.
The minister further shared that Malaysia has seen strong preliminary growth in the second quarter of 2022 (2Q22). The reopening of the nation’s economy has also led to the government’s expectation for a full-year expansion in gross domestic product (GDP) in 2022.
“To date, the data is showing that Malaysia will continue to be on track to see a 5.3% to 6.3% growth this year. We have factored into it the slowdown in the United States economy. Before that, our target was 5.5% to 6.5%. But having said that, things are very fluid. As a trading nation and a small open economy as well, we need to also monitor the growth globally,” said Tengku Zafrul.
According to Tengku Zafrul, Malaysia’s economic recovery this year will likely be underpinned by the positive growth from wholesale and retail, oil and gas, as well as commodities. For instance, Malaysia’s wholesale and retail trade has already set a new sales record in May 2022, growing 19.9% year-on-year to RM129.8 billion. Based on data from the Department of Statistics Malaysia (DOSM), this is the highest sales recorded since 2013.
“We are confident that based on the data we have today, we are on track to achieve the forecasted growth for Malaysia. And this again has been validated by reputable international agencies like S&P Global Rating, which upgraded Malaysia’s outlook rating recently. The International Monetary Fund (IMF) and the World Bank have also validated our growth figures,” said Tengku Zafrul.
In May, IMF said that Malaysia’s economy would expand by 5.75% this year, spurred on by pent-up domestic demand and strong external demand. The following month, World Bank also shared that Malaysia’s economic growth could hit 5.5% in 2022.
Meanwhile, the managing director of the IMF, Kristalina Georgieva had also noted that a global recession could be possible next year given the ongoing elevated risks. As such, the fund will be updating its forecast for the global economic growth of 2022 and 2023, and is set to release the new figures later this month. Back in April, IMF said that global growth is projected to slow from 6.1% in 2021 to 3.6% in 2022 and 2023.
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