Malaysia’s economy to expand at more moderate pace this year – Bank Negara Governor

Bank Negara Governor Tan Sri Nor Shamsiah Yunus

KUALA LUMPUR, March 29 – Malaysia will see a more moderate pace of economic growth this year after after the strong performance in 2022, said Bank Negara Governor Tan Sri Nor Shamsiah Yunus today.

The country’s growth will be mainly driven by firm domestic demand amid a slower global growth, she said at a press conference to release BNM’s Annual Report 2022, Economic and Monetary Review 2022 and Financial Stability Review for Second Half 2022 here today.

On risks to the growth outlook, she said they were fairly balanced for now. “Downside risks are largely from external developments while upside risks are mainly from domestic factors.

“We are facing a highly challenging and uncertain global landscape. We are projecting that the world economy may grow between 2.4 percent and 2.9 percent.

“Several factors will support global growth. These include resilient labour markets which will support household spending in major economies, the full reopening of China’s economy, and the continued easing of supply chain disruptions. The strength in demand from China and ASEAN are expected to
support intra-regional trade.

“Nevertheless, headwinds from elevated inflation and tight monetary policy are expected to weigh on consumption and investment activities. The global economy faces further headwinds from higher financial market volatility and uncertainty amid the recent stress in the banking sector in some advanced

“Just like any other small and open economy, the slowdown in global demand will affect Malaysia’s exports, especially manufactured goods. However, Malaysia’s diversified exports structure across products and markets will cushion this impact.

“Stronger recovery in tourist arrivals and travel receipts will provide some tailwind to exports of services, with spillovers to domestic activities and jobs. You can see from the line chart here, we have built in a rather conservative figure for travel receipts into our baseline forecast.”