KUALA LUMPUR – The government remained confident to meet its gross domestic product (GDP) forecast of 4.0% to 5.0% for this year as the domestic economy remains vibrant with many indicators showing healthy trends, said Prime Minister Datuk Seri Anwar Ibrahim.
Anwar, who is also finance minister, said that to support the momentum of domestic growth, the government maintains its responsive fiscal policy and will continue to focus on expediting the realisation of approved investments and accelerate implementation of government projects.
“Despite the global economic challenges, Malaysia’s economy remains resilient and continues to improve.
“Inflation fell from 2.8% in May to 2.4% in June, and unemployment achieved a new post-pandemic low of 3.4% in June, down from 3.5% in May,” Anwar said in a statement issued by the Finance Ministry (MoF).
According to MoF, Malaysia’s domestic inflation in June 2023 was tamer than selected advanced and regional countries such as the United Kingdom (7.9%), the Philippines (5.4%), Singapore (4.5%), Indonesia (3.5%) and the United States (3.0%).
MoF said domestic demand bulwarked the Malaysian economy in the second quarter of 2023 (Q2 2023), against the backdrop of a cooling global trade.
The Q2 2023 GDP, which expanded by 2.9%, bringing the first half (H1) of 2023’s growth to 4.2%, is in line with the government’s growth forecast of 4.0% to 5.0% for 2023.
Domestic demand remained resilient in the second quarter registering a 4.5% increase while Malaysia’s total trade contracted by 11.3% to RM643.4 billion in Q2 2023, it said.
“Public and private expenditures were also instrumental in anchoring the Malaysian economy in 2Q 2023, as they grew by 4.6% and 4.5% respectively.
“On the supply side, Malaysia’s economic expansion in Q2 2023 was underpinned by growth in the construction, services and manufacturing sectors.
“The construction sector recorded the strongest performance, soaring 6.2% in the quarter, followed by services (4.7%) and manufacturing (0.1%),” it added.
In the meantime, MoF noted that external demand for the second half (2H) of 2023 will continue to be affected by global vulnerabilities.
This includes geopolitical tensions, the continuing supply chain disruption, tight monetary policy to address global inflation and the growth prospects of major economies, many of which are Malaysia’s leading trading partners.
Meanwhile, the ministry highlighted that in line with the Madani Economy framework, upcoming policy documents – namely the New Industrial Master Plan 2030, the 12th Malaysia Plan Mid-term Review and Budget 2024 – will further set out strategies and measures to restructure Malaysia’s economy and deliver inclusive development for the rakyat.
“Focus areas include improving the ease of doing business, promoting quality investments to generate higher-income jobs, ensuring good governance, and investing in better public services and infrastructure towards improving the quality of life for the rakyat,” said the ministry. – Bernama, August 18, 2023
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