KUALA LUMPUR – The third quarter of 2022 (Q3 2022) is likely to be equally as strong as Q2 2022 which had a stellar GDP growth performance of 8.9%, bringing the overall growth to 6.9% in the first half of this year.
In a recent statement, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said that Malaysia’s economic growth momentum is likely to remain robust in Q3 2022, supported by the encouraging foreign trade and tourism performance.
As a result, he stated that the government is confident that Malaysia’s economy can achieve the GDP growth forecast set at 5.3% to 6.3% for this year.
The minister explained that Malaysia has maintained its recovery momentum with the 8.9% Q2 2022 economic growth exceeding the 5% growth recorded in Q1 for this year.
Furthermore, Malaysia had economically outperformed several developed and regional countries, including China, the US, the EU, and Singapore which expanded by 0.4%, 1.6%, 4.0%, and 4.4% respectively/
According to Tengku Zafrul, the strong Q2 2022 performance is a result of the expansionary fiscal policy via Budget 2022, positive spillovers from the financial aid and also economic stimulus packages, Budget 2021, as well as the accommodating monetary policy.
Additionally, the GDP growth in Q2 2022 was bolstered by the 18.3% expansion in private consumption that was due to the full reopening of economic activities and international borders. This is compared to the 5.5% expansion in Q1 2022.
Nevertheless, he stated that the government remains cautious regarding the performances of Q3 2022 and H2 2022, due to how the “economic outlook is still subjected to risks of slow growth as the global economic situation faces uncertainty, mainly caused by the prolonged Russia-Ukraine conflict, as well as the slowdown of China’s economy as a result of the implementation of strict COVID-19 containment measures.”
Aside from that, rising inflationary pressures due to anticipated increases in commodities and food prices, and the ongoing disruptions to the global supply chain, are all factors that may impair global economic growth, he said.
The statement also touched on a separate matter with regards to Budget 2023.
Tengku Zafrul stated that the Ministry of Finance is presently preparing for Budget 2023 via consultations and engagements with different stakeholders.
The focus, he said, will be more on sustainable subsidy management, economic reforms, as well as bolstering Malaysia’s economic resilience to future shocks.
He added that initiatives related to sustainability will also be explored more broadly following the severe challenges posed by geopolitical uncertainty and climate change.
He explained that together with the post-COVID economic recovery momentum, the upcoming Budget 2023 will continue to prioritise the well-being of the populace, especially in terms of enhancing income and social security.
Efforts to reform the economy will also be prioritised to promote long-term growth and greater business and value chain competitiveness, he explained.
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Read more: Malaysia’s economic growth projection at 5.3% to 6.3% for 2022 – BNM
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