The Malaysian economy has done relatively well in the current challenging global condition, with the headwinds generated by the ongoing war in Ukraine, supply chain disruption and energy shock.
“Elevated headwinds are causing monetary policy to remain tight in many central banks across the world,” said Bank Negara Malaysia Assistant Governor Faziali Ismail, adding that the balance of risk is about even. He said the mood is cautious going into the year 2023.
Global economy is expected to grow by about 2.4 to 2.9% due to several factors, such as the strong labour market in the advanced economies, the full effects of China’s reopening this year and the easing of supply chains.
The International Monetary Fund has stated that China is a central figure where growth is considered with the economic giant contributing around a third of the global economy.
Asia School Of Business Director Of Central Banking Research Centre Professor Ozer Karagedikli said central banks are not the sole force capable of making changes to the economy of nations. According to him, this is a role to be undertaken by a multidisciplinary force comprising various government bodies and agencies.
Where Malaysia is concerned, Faziali said the nation as a small open economy has the ability to cushion the coming shocks due to our highly diversified nature of exports in terms of partners and products. The stronger recovery in tourist arrivals will provide some tailwinds to Malaysia’s growth performance with spillover in domestic jobs and activities.
Bank Muamalat Malaysia Bhd Chief Economist And Social Finance Dr Mohd Afzanizam points out that Malaysia can further reduce risk by developing the agriculture sector to reduce dependence on imports. According to him, the nation’s agriculture profile is being skewed towards palm oil plantation at about 7 million hectares, while the other 1 million hectares comprises agro-food.
