Anwar: Govt confident of achieving economic growth forecast despite challenges
12 May 2023
Despite global economic challenges and uncertainties, the government is confident of achieving its economic growth forecast of 4.0% to 5.0% for 2023, supported by strong economic fundamentals and implementation of Budget 2023 measures, said Prime Minister Datuk Seri Anwar Ibrahim.
He said the government would continue to prioritise addressing the daily economic challenges faced by Malaysians while focusing on reducing wastage and tackling corruption.
On the economic performance in the first quarter of 2023 (1Q2023), Anwar, who is also finance minister, said that it was underpinned by broad-based growth across all sectors especially services and manufacturing, which grew by 7.3% and 3.2%, respectively.
“The economic expansion was supported by sustained domestic demand reflecting confidence in the economy, given strong private expenditure and improvement in labour market conditions,” he said in a statement released by the Ministry of Finance Ministry (MOF) on Friday (May 12).
According to Bank Negara Malaysia (BNM), Malaysia’s economy recorded a better-than-expected expansion of 5.6% in 1Q2023, driven mainly by private sector expenditure.
Commenting further, the ministry said Malaysia’s economy expanded 5.6% in 1Q 2023, comparing favourably with regional growth such as Indonesia (5.0%), China (4.5%) and Vietnam (3.3%).
“The 1Q2023 growth performance contributed strongly towards the achievement of the 2023 whole year forecast of 4.0% to 5.0%.”
It noted that the 1Q2023 growth also exceeded the 4.8% growth achieved in 1Q2022, while on a quarter-on-quarter seasonally adjusted basis, the economy grew by 0.9% in 1Q2023 compared to the contraction of 1.7% in 4Q2022.
Meanwhile, it said the labour market continued to record a positive growth momentum in 1Q2023, maintaining its full employment level with 3.5% unemployment rate against 3.6% in 4Q2022.
“Inflation rate in 1Q2023 moderated to 3.6% compared to 3.9% in 4Q2022 due to, among others, the government’s continued implementation of price control measures and consumer subsidies.
“Domestic inflation continued to trend downwards to 3.4% in March 2023, which is much lower than some advanced and regional countries such as the United Kingdom (10.1%), the Philippines (7.6%), Singapore (5.5%), the US (5.0%) and Indonesia (5.0%),” it said.
Nevertheless, quoting the recent global economic forecast by the International Monetary Fund and World Bank, MOF said Malaysia’s gross domestic product (GDP) growth is expected to moderate in 2023 due to slower external demand as a result of weakening global trade.
“Geopolitical tensions, elevated price pressures and tighter financial conditions will also continue to affect world economic outlook,” it said.
On the domestic front, the ministry added that extreme climate occurrences such as current heat wave phenomena and expected El Nino season starting in June are expected to weigh on economic activities to a certain extent, especially on the agriculture and construction sectors.
Source: Bernama
