Most recently, the International Monetary Fund (IMF) expects Malaysia's economy to grow slightly to 4.3% in 2024. It is supported by resilient private consumption and investment and a recovery in public spending.
Based on the statement of Lamin Leigh, Head of the IMF Group in the End-Of-Mission to Malaysia said the country has weathered the economic challenges well and will grow at 4% in 2023.
He also said that the private sector remained the main driver of growth throughout the year and was supported by a healthy labor market.
However, exports from Malaysia's main trading partner weakened due to sluggish external demand and China's economic slowdown. Headline and core inflation data moderated with headline inflation projected at 2.9% in 2023.
Leigh also said inflation is projected to moderate further to 2.7% next year although uncertainty around inflation projections remains including subsidy renewal.
Last October, Budget 2024 proposed a path of fiscal consolidation to rebuild buffers, reduce national forests and reduce fiscal risks.
This plan should be supported by high-impact actions such as careful consumption taxes, allocations in critical investments and targets set for low-income households.
Leigh also said monetary policy needs to continue the tightening trend by the central bank in the near term to keep inflation under control. It is justified because the Malaysian economy needs higher core inflation data and continued subsidy reform.
The implementation of policy initiatives under the Civil Economy framework, the mid-term review of the 12th Malaysia Plan and the national strategic plan need to be accelerated to support medium-term growth and achieve high-income country status.
