Gloomy outlook overshadowed Malaysia’s good GDP data
2023.02.10 01:00
Gloomy outlook overshadowed Malaysia’s good GDP data
By Tiffany Smith
Budrigannews.com – According to Bank Negara Malaysia (BNM) Governor Nor Shamsiah Mohd Yunus on Friday, Malaysia’s economy expanded by 7% in the fourth quarter compared to the same period last year due to robust demand for electrical and electronic goods and continued expansion in domestic demand.
Reuters polled economists and found that they expected the central bank to report a 6.6% increase in gross domestic product from October to December compared to the same period in 2021—a slowdown from the 14.2% annual growth seen in the third quarter.
The fastest full-year growth in 22 years, GDP for 2022 was 8.7% higher than in 2021, exceeding the government’s forecast of 6% to 7%.
In light of the global slowdown, the central bank has stated that it anticipates that full-year GDP growth will moderate to between 4% and 5% in 2023.
It highlighted risks on Friday, including an increase in global interest rates, a reemergence of significant supply chain disruptions, and a further escalation of geopolitical tensions.
In addition, despite risks to the downside, it did not rule out the possibility of growth exceeding expectations in 2023.
Nor Shamsiah told reporters, “Malaysia will not go into a recession,” adding that income was growing and investment numbers remained strong.
BNM anticipates that the reopening of China’s international borders will mitigate the effects of a slowdown in export growth and boost tourist arrivals.
“We remain hopeful for growth in the first quarter; She added, “It may also demonstrate stronger growth momentum than in Q4.”
She stated that the bank anticipated that headline and core inflation would moderate but remain elevated throughout 2023. In 2022, the average rates of headline and core inflation were 3% and 3%, respectively.
Following four rate increases in a row the previous year, BNM unexpectedly maintained its benchmark interest rate last month, highlighting potential threats to economic expansion.
According to Nor Shamsiah, the bank was able to evaluate the impact of its OPR adjustments on inflation and the economy as a result of its decision to maintain the overnight policy rate (OPR).
She stated, “This would provide us with better clarity on inflation and economic output.”
