Govt confident of meeting GDP forecast of 4-5% in 2023: PM Anwar

KUALA LUMPUR: The government remained confident to meet its gross domestic product (GDP) forecast of 4.0 per cent to 5.0 per cent for 2023 as the domestic economy remains vibrant with many indicators showing healthy trends, said Prime Minister Datuk Seri Anwar Ibrahim.

Anwar who is also the 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.

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“Despite the global economic challenges, Malaysia’s economy remains resilient and continues to improve.

“Inflation fell from 2.8 per cent in May to 2.4 per cent in June 2023, and unemployment achieved a new post-pandemic low of 3.4 per cent in June 2023, down from 3.5 per cent in May,” Anwar said in a statement issued by the Ministry of Finance (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 per cent), the Philippines (5.4 per cent), Singapore (4.5 per cent), Indonesia (3.5 per cent) and the United States (3.0 per cent).

MoF said domestic demand bulwarked the Malaysian economy in the second quarter of 2023 (2Q 2023), against the backdrop of a cooling global trade.

The 2Q 2023 GDP which expanded by 2.9 per cent, bringing the first half (1H) of 2023’s growth to 4.2 per cent, is in line with the government’s growth forecast of 4.0 per cent to 5.0 per cent for 2023.

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Domestic demand remained resilient in the second quarter registering a 4.5 per cent increase while Malaysia’s total trade contracted by 11.3 per cent to RM643.4 billion in 2Q 2023, it said.

“Public and private expenditures were also instrumental in anchoring the Malaysian economy in 2Q 2023, as they grew by 4.6 per cent and 4.5 per cent respectively.

“On the supply side, Malaysia’s economic expansion in 2Q 2023 was underpinned by growth in the construction, services and manufacturing sectors.

“The construction sector recorded the strongest performance, soaring 6.2 per cent in the quarter, followed by services (4.7 per cent) and manufacturing (0.1 per cent),” it added.

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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. – BK