KUALA LUMPUR, March 7 – The Malaysian economy is projected to grow by four per cent to five per cent this year, supported by robust domestic demand and an improvement in the external sector, said BNM governor Datuk Abdul Rasheed Ghaffour.
He said Malaysia’s exports are benefiting from the tech upcycle and the strengthening global economy, particularly since Malaysia is a global leader in the semiconductor industry.
Simultaneously, Abdul Rasheed said the government’s fiscal reform initiatives, which include the Public Finance and Fiscal Responsibility Act (FRA) and the Medium Term Fiscal Framework (MTFF), will support the paring down of the fiscal deficit to between -3.0 per cent and -3.5 per cent of gross domestic product by 2025.
“The government is committed to ensuring fiscal sustainability through several fiscal reform initiatives. This will be supported by both revenue enhancements and expenditure optimisation, including broadening the tax base,” he said in his keynote address at the virtual Islamic Finance Symposium 2024, organised by Fitch Ratings, on Wednesday.
Abdul Ghaffour also emphasised that the country’s external sector resilience is the key strength and this is contributed by a current account surplus, a manageable level of external debt, a net external asset position and an adequate level of international reserves.
“This has enabled Malaysia to weather the volatile global financial conditions from a position of strength, and has ensured the domestic financial markets continue to remain orderly,” he added.
Abdul Ghaffour noted that in 2023 alone, a total of about US$70 billion (US$1=RM4.729) worth of investment was approved, with foreign direct investment accounting for 57 per cent.
Also, almost 74 per cent of the projects approved between 2021 and 2023 have been realised, he said.
