Amid rising global economic uncertainties, the Malaysian economy will inevitably face downside risks next year, Malaysia’s ratings agency said in a note.
“Malaysia cannot escape the ripple effects of slower global growth next year, which will directly soften external demand and dampen Malaysia’s export performance,” said Woon Khai Jhek, head of economic research at RAM Rating.
According to RAM Rating, domestic demand will continue to be the key driver of growth next year, supported by the continued recovery in the labor market and existing policy support measures.
That said, notable price pressures and monetary policy tightening are likely to dampen consumer spending.
He also said further escalation of geopolitical tensions, supply chain disruptions, labor shortages and political uncertainty on the home front could add pressure to the country’s growth in 2023.
However, a faster than expected return of international travel and tourism is a potential boon for Malaysia’s growth.
He also said Malaysia’s broad and diversified national economy should help prop up and mitigate the impact of weaker exports, and the country’s stellar growth in 2022 should also provide a strong foundation for growth in a challenging, albeit slower, 2023. .
Malaysia’s GDP in the first three quarters of 2022 expanded 9.3 percent year-on-year.
RAM Rating estimates that Malaysia’s annual growth will reach 8.2 percent this year. ■