Malaysia’s GDP grows by record high in two decades

Kuala Lumpur (VNA) – The Bank Negara Malaysia (BNM) has recently announced that Malaysia’s gross domestic product (GDP) grew by 8.7% last year, and gave assurance that Malaysia’s economy will not be going into a recession this year.

BNM governor Tan Sri Nor Shamsiah Mohd Yunus pointed out that last year’s growth rate is the highest annual level posted by the country in the past 22 years - after the 8.9% recorded in 2000.

The growth in 2023 would continue to be forthcoming, though at a much more moderate pace because of slower external demand, but it will still be supported by domestic demand, she said.

Mohd Afzanizam Abdul Rashid, head of economics and research for the Employees Provident Fund, which manages retirement funds for private sector workers, said the reopening of China’s economy could benefit Malaysia’s tourism industries which then could result in more activity in the aviation, food and beverages, hospitality, and to some degrees, healthcare industries.

The central bank did not give an updated growth forecast for 2023, saying that it will be announced when Prime Minister Anwar Ibrahim tables the revised annual budget later this month.

Headline inflation came in at 3.3% in 2022 and is expected to moderate this year, albeit remaining at elevated levels.

However, Shivaan Tandon, Emerging Asia economist for research firm Capital Economics, said any benefit from China’s reopening may not be able to cover the shortfall from weak demand for Malaysia’s electronics, which account for a third of Malaysia’s exports, and domestic demand is likely to remain muted as households and the corporate sector grapple with higher borrowing costs./.