Recently, the International Monetary Fund has recommended Malaysia implement a more restrictive monetary policy to bring inflation down towards the 2-3% range in the medium term. (Photo: Kuala Lumpur (VNA) – Malaysia’s Gross Domestic Product (GDP) is expectedto grow 4.3% in 2024, up from the 4% growth expected for 2023. Thiswill mainly be driven by higher global export demand, particularly from thetechnology sector, according to the International Monetary Fund (IMF).
IMF’s Asia Pacific regional studies divisionchief Shanaka (Jay) Peiris said Malaysia is a very open economy, especially inthe export of electrical and electronics (E&E) products. He expectedthat the global economy and export demand to gradually recover, particularlyfor the technology sector to pick up too next year, and that will add to higher growth.
On Malaysia’s inflation, he said it has beengradually slowing but the subsidy reforms tabled in Budget 2024 will pose somerisks to that. However, he reckoned that the subsidy reforms will be a"one-off” event and that it would be unnecessary for additional measuresfrom Bank Negara Malaysia (BNM).
Shanaka said the IMF’srecommendation for Malaysia in the last report showed that the monetary policy should be restrictive enough to bring the inflation down towards the 2-3% rangeover the medium term.
He said that at themoment, interest rates have been increased and inflation has been graduallycoming down. Therefore, maintaining restrictive stance will help bring downinflation./.
