Digitalisation, tech adoption will be national priority for boosting Malaysia’s longer-term economic prospects

by S BIRRUNTHA / pic by TMR FILE

MALAYSIA’S rating affirmation by Fitch Ratings Inc attests to the economy’s resilience with good medium-term growth prospects and stable current account surplus, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz (picture) said.

He noted that the affirmation of Malaysia’s long-term foreign-currency issuer default rating at BBB+ with a stable outlook comes amid unprecedented credit rating pressures globally, where the three main credit rating agencies had issued 101 negative outlook positions as at the end of 2020.

Moving forward, Tengku Zafrul said digitalisation and technological adoption will be a national priority for boosting Malaysia’s longer-term economic prospects and resilience.

“This will be pursued in tandem with the government’s commitment to medium-term structural reforms to attract higher quality investments, as well as generate high-skilled and high-paying jobs,” he said in a statement commenting on the affirmations by Fitch Ratings recently.

Tengku Zafrul added that the government remains committed to ensuring fiscal sustainability and medium-term fiscal consolidation.

He said that over the past decade, the fiscal deficit had been successfully reduced from 6.7% (2009) to 3.4% (2019) of GDP.

“Guided by the medium-term fiscal framework and supported by the gradual implementation of the medium-term revenue strategy, which aims to improve the country’s revenue base, the government will resume its consolidation path when the country exits the pandemic.

“This will balance short-term fiscal requirements with long-term fiscal and economic sustainability,” he noted.

Tengku Zafrul said overall, the government’s current priority is to protect lives from the threat of Covid-19 and ensure the country’s economic growth prospects remain strong in the medium to longer term, guided by the National Recovery Plan (NRP) and the principles of prudent financial management.

He added that the government will continue to respond strategically, proactively and decisively under this challenging Covid-19 environment, while also minimising permanent economic scarring from the pandemic crisis.

Additionally, the minister said the National Covid-19 Immunisation Programme (NCIP) would be further intensified to accelerate economic recovery, in which Malaysia is currently one of the fastest nations in the world to administer vaccinations, with more than 400,000 doses daily.

“NCIP is expected to boost the vaccination rate to 500,000 doses daily, while also aiming for 100% of the adult population in Selangor and Kuala Lumpur to be given at least one dose of the vaccine by Aug 1 under the Operation Surge Capacity.

“Based on this fast-track approach, 100% of the adult population are expected to be fully inoculated by the end of October 2021,” he noted.

Tengku Zafrul said other factors that will drive Malaysia’s economic recovery include improving external demand from major trading partners and the implementation of infrastructure projects with high multiplier impact.

“Notably, Fitch has acknowledged that Malaysia’s manufacturing sector and exports will continue to benefit from thriving global demand for the country’s products like electrical and electronics, crude oil and personal protective equipment,” he said.