World Bank lifts Malaysia’s 2022 GDP forecast to 6.4%

The revision is done on the back of heightened economic activities in 1H22

by ANIS HAZIM / pic TMR FILE

THE World Bank Group has upgraded Malaysia’s GDP growth forecast to 6.4% from 5.5% previously driven by the country’s economic recovery in the first half of 2022 (1H22).

World Bank lead economist for Malaysia Dr Apurva Sanghi said Malaysia recorded an above-expectation in 1H22 supported by its domestic consumption, export growth from electrical and electronics (E&E) and commodity sectors.

He also noted that the country’s services, tourism, manufacturing and construction sectors have been performing better in 1H22.

“We expect some positive momentum to spill over to the 2H22, plus it is mathematical sort of an obvious thing that the third quarter (3Q) growth in 2022 should benefit from a low base of 3Q21 —when the economy contracted by 4.5%,” Sanghi told a virtual media briefing in conjunction to East Asia and Pacific Economic Update today.

Despite the revised forecast, he said the consumption, however, could be adversely affected on the back of an uncertain environment.

“Malaysia was the sixth largest producer of semiconductors and largest exporter of E&E, but the talent crunch is biting, so this remains to be seen and how it will play out during the global slowdown and recession, as the World Bank reported,” he said.

Sanghi expects that the problem could significantly affect the central demand towards the 4Q23 which will be poised to uncertainty in the country’s growth.

“For an economy that is almost 60% dependent on private consumption and two-thirds of growth coming from private consumption, any shock to domestic demand could delay or apprehend the growth momentum in the second half of the year,” he added.