September 30, 2022

Finance Minister: Malaysia’s Stellar 8.9% Q2 GDP Growth Suggests Equally Strong Q3

The government is confident that the Malaysian economy can meet the official GDP growth projection for 2022 of 5.3% to 6.3%. — Photo by Choo Choy May

Friday, August 12, 2022 5:59 PM MYT

KUALA LUMPUR, Aug 12 – The stellar growth in gross domestic product (GDP) of 8.9% in the second quarter (Q2 2022), which lifted GDP growth in the first half (H1 2022) to 6.9%, suggests “equally strong growth in the third quarter,” Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz said.

“Economic growth momentum is expected to remain strong in the third quarter, driven by encouraging performance in foreign trade and tourism,” it said in a statement today.

As such, he said the government is confident the Malaysian economy can meet the official GDP growth projection of 5.3% to 6.3% for 2022.

Tengku Zafrul said Malaysia’s economy continued its recovery momentum, with 8.9% growth in the second quarter outpacing the 5% expansion in the first quarter and outperforming the economic performance of several developed and regional countries. , including China (0.4%), the United States (1.6%), the European Union (4.0%) and Singapore (4.4%).

Tengku Zafrul attributed the strong performance in the second quarter to expansionary fiscal policy through the 2022 budget, positive spillovers from financial aid and economic stimulus packages and the 2021 budget, and monetary policy that remained accommodative. .

He said the second quarter growth was also mainly supported by the 18.3% growth in private consumption (compared to 5.5% growth in the first quarter of 2022) due to the full reopening of the economy and international borders.

Nonetheless, he said the government remained cautious about the second half performance, “as the economic outlook is still subject to downside risks to growth due to global economic uncertainty, caused mainly by the protracted conflict between the Russia and Ukraine, as well as the economic crisis in China”. slowdown following the implementation of strict Covid-19 containment measures.

“In addition, higher inflationary pressures from expected increases in commodity and food prices, as well as continued global supply chain disruptions, are factors likely to impact global growth.” , he added.

In a further development, Tengku Zafrul said that the Ministry of Finance (MOF) is currently preparing the 2023 budget through consultation and engagement with various stakeholders, with priorities including more sustainable grant management, economic reforms and strengthening the country’s resilience to future shocks.

He said sustainability-related initiatives will also be considered more broadly following the severe challenges of geopolitical uncertainty and climate change.

“Alongside the momentum of economic recovery post-Covid-19, the 2023 budget will continue to prioritize the well-being of the population, including improving incomes and social protection.

“Economic reform efforts will also be prioritized to ensure long-term growth and increased competitiveness in businesses and value chains,” he said. — Bernama