Malaysian finance minister warns of risks to recovery
Malaysia is on the road to recovery in terms of headline economic numbers, but Finance Minister Zafrul Abdul Aziz has warned of risks to the recovery amid an uncertain global economic outlook.
Illustrative image (Source: Reuters)He said the numbers speak for themselves as Malaysia had a strong first quarter this year, with gross domestic product (GDP) growth of 5%, and is on track to achieve a GDP growth rate of 5.3 to 6.3% in 2022.
Meanwhile, the unemployment rate dipped to 3.9% in both May and June 2022, showing a declining trend for 14 consecutive months now, he said in his opening keynote address at the Malaysian Student Leaders Summit XVI 2022 on August 8.
The minister said Malaysia’s trade performance has also remained resilient, maintaining its growth momentum as trade data showed double digit growth for 16 consecutive months since February 2021.
However, he said Malaysia is also facing risks and challenges to recovery such as the rising global inflation as commodity prices continue to increase and supply chains disrupted due to the ongoing Russia-Ukraine conflict.
Malaysia's inflation rate climbed to a one-year high of 3.4% in June 2022, with food inflation in June at 6.1%, he said, adding that the government has managed to cushion the impact through subsidies and price caps on certain key goods.
The finance minister noted that the US Federal Reserve’s cumulative rate hike of 225 basis points in total thus far has weakened numerous currencies, including the ringgit.
He also stressed that the risk of new COVID-19 variants and sub-variants remains present and Malaysia, together with the rest of the world, must be ready for the next global pandemic and may need to focus more on preventive rather than curative measures./.
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