KUALA LUMPUR – MIDF Research is cautiously optimistic that Malaysia’s economy will remain resilient amid expected headwinds and able to climb next year’s “wall of worry” with the support of robust domestic demand.
Director and head of research Imran Yassin Md Yusof said the institute foresees the country’s gross domestic product growth moderating to 4.2% from this year’s expected 8.0%, mainly due to external trade deceleration due to global slowdown and rising interest rates.
“However, MIDF Research is optimistic that the domestic demand will support the economy, fuelled by continuous upbeat consumer spending, price pressure moderation, tourism activity improvements and infrastructure project revivals,” he told a media briefing on next year’s market outlook here today.
He said inflationary pressures have been this year’s key feature due to the spillover of last year’s strong demand and exacerbated by the unexpected Ukraine-Russia conflict, resulting in high commodity prices while China’s intermittent lockdowns have caused supply chain disruptions.
“In response to the high inflation, monetary authorities globally adopted a tightening stance to curb price pressures and anchor inflation expectations,” he noted.
The United States Federal Reserve’s aggressiveness in particular had caused downward pressure on risk assets, notably in the equity, bond and currency markets, he added.
He said the global economy is expected to dampen in 2023, mainly dragged by advanced economies’ slowing growth while emerging economies will be the major contributor towards global growth as domestic economic activities continue to recover from the global pandemic.
However, he said highly-open trading economies will likely be impacted by the expected softening of final demand and adjustments in global production activities. – Bernama, December 7, 2022
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