The International Monetary Fund (IMF) is optimistic that Malaysia’s economy will expand by 5.75 per cent in 2022, driven by pent-up domestic demand and continued strong external demand.
This is in line with the government’s growth projection of between 5.3 per cent and 6.3 per cent for 2022. The economy expanded by 3.1 per cent last year.
The IMF attributes the country’s high vaccination rates and limited movement restrictions would also support economic expansion.
On the flip side, It said that there were substantial downside risks, including the Covid-19 pandemic and the war in Ukraine, a similar predicament faced by both developed and developing economies globally.
The IMF also welcomed Malaysia’s accommodative monetary policy stance, as inflation expectations are well anchored.
To this end, the IMF noted Malaysia’s commitment to exchange rate flexibility, saying it will continue to serve the country well.
This was further reinforced just last week when Bank Negara Malaysia reaffirmed its position that it will not peg the ringgit despite the apparent weakness of the currency.
This was because the banking sector was still well-capitalised and highly liquid, buttressed against a strong asset quality.
The IMF also said that Malaysia’s financial sector “remains resilient,” and that it was
The IMF, which has 190 member countries, also lauded the implementation of the 12th Malaysia Plan as it focused on boosting labour productivity, enhancing the digital and green economies, and strengthening fiscal governance.
