Malaysia’s GDP is expected to reach above RM1.5t this year despite the uncertainties due to global trade threats, protectionist policies and brewing conflicts
By SULHI KHALID / Pic By TMR File
Malaysia is on the right track to achieve its fiscal target, including the 3.4% fiscal deficit to GDP this year, according to international rating agencies.
The Finance Ministry said S&P Global Ratings, Fitch Ratings Inc and Moody’s Investors Service Inc have expressed their confidence in Malaysia’s economic performance.
This sentiment was shared with Finance Minister Lim Guan Eng (picture) when he attended the International Monetary Fund and World Bank Group Spring Meeting in Washington last month.
The country’s GDP is expected to reach above RM1.45 trillion this year despite uncertainties due to global trade threats, protectionist policies and brewing conflicts.
Malaysia, as an open economy, is dependent on exports to global markets.
The government faces challenges to reduce the deficit due to the ballooning debts inherited from the previous government, especially related to the billions in contingent liabilities.
International rating agencies had previously voiced their concerns about the country’s widened deficit. But the government had to spend to ensure growth. Worries also emerged that the rating agencies would downgrade Malaysia, subsequently pushing the cost of borrowings higher.
Lim, who represented the 11-member South-East Asia Voting Group (SEAVG), had emphasised on the role of the World Bank in setting up a model to prevent middle-income countries from slipping back into low-income status, or escape the middle-income trap.
The SEAVG comprises Brunei, Fiji, Indonesia, Laos, Malaysia, Myanmar, Nepal, Singapore, Thailand, Tonga and Vietnam.
Lim also shared his views of Malaysia’s aspiration of using technology and the digital economy — especially in embracing 5G — in driving the nation towards achieving high-income nation status.
The Finance Ministry in a statement said Lim also outlined the risks of digital disruption and possible loss of jobs in traditional sectors.
Lim said Malaysia does not accept creative destruction, and there is a need to create new jobs through income incentives or supplements to replace jobs necessarily lost through digital disruption.