Bank Negara Malaysia (BNM) today reiterated that the Malaysian economy will expand between 5.5 percent and 6.5 percent this year, underpinned by continued expansion in global demand and higher private sector expenditure, said Governor Tan Sri Nor Shamsiah Mohd Yunus.
Nor Shamsiah said Malaysia was well-positioned to gain as global growth and trade bounce back, as observed in 2021.
She pointed out that strong external demand for electrical and electronics (E&E) products and commodities, particularly from the country’s key trade partners including China, the United States (US), and the regional economies, would contribute to further expansion in export-oriented sectors.
“Importantly, the broad-based improvement in overall income, employment conditions, and consumer sentiments would provide a lift to household spending,” she said, also noting that the central bank would be announcing its latest assessment on the economy in March.
The governor added the continuation of major investment projects in key economic sectors, such as in E&E manufacturing and digital investments, would lift growth further.
Nevertheless, the risk to the outlook for 2022 remained, arising from a weaker-than-expected global growth, worsening supply chain disruptions, and the emergence of severe and vaccine-resistant COVID-19 variants of concern, she added.
Meanwhile, Nor Shamsiah said headline inflation was likely to remain moderate in 2022 as the base effect from fuel inflation dissipates, while core inflation was expected to be modest with the upward pressure contained by the continued slack in the economy and labour market.
“Overall, the inflation outlook continues to be subject to global commodity price developments and risks from prolonged supply-related disruptions,” she said.