IMF Maintains Forecast of Malaysia’s 2023 Economic Growth Rate at 4.5 Pct

KUALA LUMPUR 27 DISEMBER 2022. Pemandangan Menara Kuala Lumpur dan Menara Berkembar PETRONAS pada waktu senja di Kuala Lumpur. NSTP/AIZUDDIN SAAD

The International Monetary Fund (IMF) reiterated on Friday that Malaysia’s economic growth will moderate to 4.5 percent in 2023.

The IMF executive board said in a statement that the slower growth is reflecting largely the global headwinds.

It said the external risks include the possibility of an abrupt global slowdown or recession, with an associated spike in global risk premia, capital outflows and sudden stop risks.

Geo-economic fragmentation and geopolitical tensions resulting in a reconfiguration of trade, supply disruptions, and rising input costs, among other disturbances, could also negatively affect Malaysia’s growth prospects, according to the IMF.

Malaysia’s economic growth reached 8.7 percent in 2022, driven by pent-up domestic demand following the reopening of the economy in April last year and strong export performance.

However, the IMF noted that the recovery remains uneven, with agriculture, mining, and particularly construction sectors remaining below pre-pandemic levels, and inequality has risen during COVID-19.