KUALA LUMPUR: Malaysia’s economic system is anticipated to strengthen this 12 months because the nation transitions to the endemic section, beginning with the reopening of worldwide borders.
Gross home product (GDP) development is projected to be round 6% (2021: 3.1%) for the 12 months, and the first-quarter GDP is more likely to file a development of 5% to six% (2021: minus 0.5%).
Sunway College professor of economics Dr Yeah Kim Leng stated the expansion momentum could be supported by stronger non-public consumption and investments amid the constructive sentiment and total outlook.
“The resource-based and commodity sectors, significantly palm oil, rubber and oil and fuel (O&G) are anticipated to thrive on the again of excessive costs,” he instructed Bernama.
{The electrical} and electronics sector would additionally proceed to profit from sturdy export demand as the worldwide electronics provide stays constrained, whereas the providers sector (together with the import and export of providers) can also be anticipated to see stronger demand with the reopening of the economic system.
Yeah stated the nation’s transition into the endemic section would have a constructive spillover impact on numerous industries.
“The aviation, hospitality and tourism-related industries are anticipated to emerge from their two-year doldrums and chart higher efficiency as corporations rebuild their stability sheets,” he stated, including that it might even be a shot within the arm for the retail sector .
Moreover, the lifting of border restrictions would additionally facilitate cross-border enterprise actions, commerce and investment-related providers, in addition to mergers and acquisitions.
In the meantime, Yeah stated though Malaysia just isn’t immediately impacted by the Russia-Ukraine battle, the disruptions to international power and commodity markets, coupled with larger danger aversion would have blended short-term results on the nation’s inflation, export earnings and monetary markets.
He famous that the second-round adverse results on international development would dampen the exterior outlook for Malaysia’s extremely open economic system.
“Each the commodity and monetary markets will see elevated volatility though the upper commodity costs – together with O&G –shall be constructive for Malaysia’s export earnings and additional widen its present account surplus.
“Whereas short-term international portfolio inflows might enhance as a consequence of diversification of geopolitical danger in favor of the Malaysian markets, the market swings are more likely to be elevated since geopolitical, development and coverage dangers abound within the present setting,” he stated.
Shifting ahead, the nation’s sturdy financial outlook can even assist to spice up the ringgit, which is projected to strengthen to 4.10 towards the US greenback from 4.17 final 12 months regardless of heightened uncertainty, based on Kenanga Analysis.