Malaysia’s 2023 Economic Outlook remains favourable despite global headwinds
07 Oct 2022
The outlook for Malaysia’s economic growth in 2023 remains favourable despite global headwinds such as inflationary pressures, economic uncertainties and climate change, said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz (pix).
Nonetheless, he said, the government will maintain high fiscal support and continue to adopt an expansionary fiscal stance to stimulate economic activity in sustaining the gross domestic product (GDP) growth momentum, which is forecast at between 4 per cent and 5 per cent in 2023.
Tengku Zafrul said Malaysia’s responsive and responsible fiscal policies have consistently allowed the government to steer the nation’s economic development and overcome the recent Covid-19 challenges.
“Budget 2023 aims to provide favourable conditions and ensure a balance between economic needs and fiscal consolidation to facilitate economic growth, nurture the sustainability agenda and promote the rakyat’s well-being.
“This will be accomplished by maintaining the balance between prudent spending and investing for the future through a pragmatic fiscal framework, he said in the 2023 Fiscal Outlook and Federal Government Revenue Estimates report released today.
The minister said that in order to strengthen Malaysia’s competitiveness and resilience, the government will prioritise recovery in 2022 and build the momentum for reforms in 2023.
He said the government’s fiscal strategies are intended to strengthen recovery and facilitate reforms, with the key objective of ushering Keluarga Malaysia towards sustainable socio-economic resilience.
“To that end, our policy responses are also aimed at encouraging collective responsibility at all levels of society to empower business communities, civil society and the rakyat to collaborate in building a better and more sustainable Malaysia,” he said.
Moving forward, he said, the government will continue its fiscal consolidation efforts through various means, including improving fiscal governance, broadening the revenue base and optimising expenditure.
Meanwhile, measures such as the Medium-Term Revenue Strategy and the Public Expenditure Review will increase fiscal space, while the upcoming Fiscal Responsibility Act will strengthen fiscal governance, allowing the government to implement counter-cyclical measures and maintain economic resilience, said the minister.
He added that the government will continue to provide policy support for growth and job creation for the rakyat, while also implementing reforms to ensure long-term fiscal sustainability.
“We are committed to keep the federal government’s statutory debt below the statutory limit of 65 per cent of GDP and implementing debt management strategies to ensure adequate fiscal space to mitigate the impact of unexpected economic shocks or circumstances.
“Regardless of global challenges, the government is determined to consolidate its fiscal position by continuing to be responsive, responsible and reformist in its policy approach,” said Tengku Zafrul.