by HAJAR UMIRA MD ZAKI

THE Socio-Economic Research Centre (SERC) foresees Malaysia will not be facing recession, despite the slow and normalised economic growth.

ED Lee Heng Guie (picture) said Malaysian consumers are expected to spend but not as much as before.

“We do not see Malaysia slipping into a recession, we just see slower (economic) growth, as inflation and cost of living pressures continue to weigh on domestic spending,” he told reporters in a briefing today.

Malaysia’s economic growth was predicted to slow down and normalise to 4.1% this year compared to the strong recovery growth of 8.7% last year, as the country emerges from the post Covid-19 pandemic crisis.

Meanwhile, according to SERC, among the economic growth that continues to decline was the preliminary real GDP in the first quarter (1Q), which saw 4% to 4.5% growth this year, compared to 5% in 1Q of 2022.

“So, we think 1Q is our preliminary, first round estimate for GDP, 1Q around 4.5%.

“If it turns out to be better, maybe closer to 5%. So, we are taking the round 4.5% in the 1Q,” he said.

Lee also mentioned that Bank Negara Malaysia (BNM) may increase the Overnight Policy Rate (OPR) to 3% this year, although it is not yet confirmed when this will occur.

Additionally, the briefing noted that headline inflation pressure eased off from its peak and stabilised at 3.7% year-on-year in February 2023, compared to 3.7% in January and 3.3% last year.

Lee suggested that BNM should remain vigilant about inflation while supporting the economy.