Expect slower growth in 2023, MARC Rating says

Despite that, it will still be a positive growth for Malaysia compared to other countries that may record negative growth in 2023


MALAYSIA’S economic growth is likely to slow for next year on possible imported inflation due to weakness in the ringgit, MARC Rating Corp Bhd said.

MARC group CEO Datuk Jamaludin Nasir foresees that the global economy is “not in a good shape” entering 2023, moreover, the local currency is currently hitting the 4.5 benchmarks.

“For next year, there is obvious concern about imported inflation because of the weakening of ringgit, especially since we are a country that is quite key in terms of imported goods and imported food supply,” Jamaludin told reporters after presenting the MARC Ratings’ Lead Managers League Table Awards 2021 yesterday.

Despite the slower growth, he said it will still be a positive growth for Malaysia compared to other countries that may record negative growth in 2023.

He also projects the third quarter of 2022 (3Q22) growth could be higher than Bank Negara Malaysia’s (BNM) projection of 6.3%.

“We are expecting the growth to probably be a bit higher than that (BNM’s projection) because in 1Q22, it is about 11.9%, so we expect the growth for the quarter to also be healthy,” he said.

On the upcoming Budget 2023, he said the government should look into implementing targeted subsidies to help the growth of the country.

He also hopes that Budget 2023 to continue to be an expansionary budget with the focus to create more jobs and upgrading local talents’ skills and capabilities.

“We should relocate our resources to ensure we are upping our economic value chain from the low-cost economy to the middle and higher economy by improving our local production, research and development, and talents,” he added.

Meanwhile, commenting on the performance of Malaysian investment banks this year, he said most of them are facing a challenge in view of higher interest rates.

“There is also lesser deal count as most potential issuers are taking a wait-and-see attitude. Following the US Federal Reserve’s latest interest rate hike, we are also expecting the Bank of England to also increase its interest rate by another 50 basis points,” he further said.