Will Malaysia avoid a recession in 2023 despite global slowdown?

Question

Accepted Answer

Malaysia Poised to Avoid Recession in 2023 Amid Global Economic Headwinds

Malaysia is not anticipating a recession in 2023, even with the projected challenges to growth stemming from a slowdown in the global economy. The nation's economic expansion is forecast to fall within the range of 4.0 per cent to 5.0 per cent for the year, indicating resilience against external pressures. This outlook is supported by the central bank's proactive management of inflation, which is expected to moderate from its recent peak.
Economic Growth Forecast for 2023

The Malaysian economy is projected to achieve a growth rate between 4.0 per cent and 5.0 per cent in 2023. This forecast signifies continued expansion that is expected to surpass pre-pandemic levels, despite acknowledged challenges from a decelerating global economic landscape.
Inflation Outlook and Management

Headline inflation is anticipated to be between 2.8 per cent and 3.3 per cent in 2023, a decrease from its likely peak of 4.5 per cent in the third quarter of 2022. Core inflation, which saw an increase to 3.7 per cent in the third quarter of 2022, is expected to average near the upper limit of the 2.0 per cent to 3.0 per cent forecast for 2022. These inflationary pressures are attributed to a combination of high costs, particularly for food items, and robust domestic demand.
Central Bank's Policy Stance

Bank Negara Malaysia (BNM) is actively managing inflation risks through gradual adjustments to its policy rate. The central bank aims to prevent excessive broad-based price increases by acting preemptively, rather than waiting for inflation to become significantly high. This approach seeks to avoid the need for more drastic and potentially damaging rate hikes that could negatively impact households and businesses.
Factors Influencing Inflation

Elevated cost pressures, especially in food prices, alongside strong consumer demand, are identified as key drivers of current inflation. Furthermore, potential shifts in domestic subsidy policies and global commodity price fluctuations, influenced by ongoing geopolitical events and supply chain disruptions, present upside risks to the inflation outlook for 2023.

Reading history

Hide →

This history is cleared when the page is closed.

Will Malaysia avoid a recession in 2023 despite global slowdown?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

1

0

0

Share with friends