Recently, the International Monetary Fund has recommended Malaysia implement a more restrictive monetary policy to bring inflation down towards the 2-3% range in the medium term. (Photo: Kuala Lumpur (VNA) – Malaysia’s Gross Domestic Product (GDP) is expected to grow 4.3% in 2024, up from the 4% growth expected for 2023. This will mainly be driven by higher global export demand, particularly from the technology sector, according to the International Monetary Fund (IMF).
IMF’s Asia Pacific regional studies division chief Shanaka (Jay) Peiris said Malaysia is a very open economy, especially in the export of electrical and electronics (E&E) products. He expected that the global economy and export demand to gradually recover, particularly for the technology sector to pick up too next year, and that will add to higher growth.
On Malaysia’s inflation, he said it has been gradually slowing but the subsidy reforms tabled in Budget 2024 will pose some risks to that. However, he reckoned that the subsidy reforms will be a "one-off” event and that it would be unnecessary for additional measures from Bank Negara Malaysia (BNM).
Shanaka said the IMF’s recommendation for Malaysia in the last report showed that the monetary policy should be restrictive enough to bring the inflation down towards the 2-3% range over the medium term.
He said that at the moment, interest rates have been increased and inflation has been gradually coming down. Therefore, maintaining restrictive stance will help bring down inflation./.
