9-7-2023 (KUALA LUMPUR) Bank Negara Malaysia (BNM) is maintaining its GDP growth forecast for Malaysia at 4.0-5.0% for the year, according to the newly-appointed governor Datuk Abdul Rasheed Ghaffour. Despite challenges arising from slowing global growth, Malaysia’s economy is expected to be driven by firm domestic demand, with the job market showing improvements that continue to support consumer spending. The tourism sector is recovering well and Abdul Rasheed expects airlines to raise flight capacity to meet higher travel demand.
Multi-year infrastructure projects have also continued to spur economic activity. Abdul Rasheed’s comments came in his first exclusive media interview since taking up his post for a five-year term that began on July 1. A fuller picture of Malaysia’s performance for the first half of 2023 will be unveiled in a few weeks when the Department of Statistics releases the second-quarter GDP data.
According to BNM’s Economic and Monetary Review 2022 report, the Malaysian economy is expected to grow between 4.0-5.0% in 2023, driven by firm domestic demand amid challenges arising from slowing global growth. Gross exports are expected to expand modestly at 1.5% in 2023, in tandem with more subdued global trade activity, the bank said. Further recovery in inbound tourism and moderation in import growth would continue to provide support to net export growth.
In Q1 2023, Malaysia’s economy recorded a better-than-expected growth of 5.6% driven by private sector expenditure amid further expansion of household spending, continued investment activity, improving labour market, and higher tourism activities. Malaysia recorded a moderate GDP growth of 8.7% in 2022 against the backdrop of full upliftment of Covid-19 containment measures, resilient growth in exports, particularly commodity exports, the revival of tourism activity, and continued policy support.
