Tengku Zafrul: Ringgit weakness significantly impacts Malaysia’s IMD competitiveness ranking

KUALA LUMPUR – Malaysia’s decline in the IMD’s World Competitiveness Rankings 2024 is due to the weakness of the ringgit last year, according to Minister of Investment, Trade and Industry, Tengku Datuk Seri Zafrul Abdul Aziz.

He explained that based on the ministry’s preliminary study of the report, the primary reason for the country’s drop in the index from the 27th place in 2023 to the 34th spot in 2024 was the reliance on 2023 data to measure national competitiveness.

“(The report) was based on data from last year, 2023, compared to 2022, so there is a one-year lag. The factor that had the most significant impact is the stability of the ringgit, as highlighted in the rankings,” he said after launching the Centralised Sustainability Intelligence (CSI) Solution at Bursa Malaysia today.

Elaborating further, Tengku Zafrul said the ringgit’s weakness last year had various implications, including the valuation of investments, productivity, and efficiency which is closely related to the currency’s value, consequently reflecting concerns about economic stability.

“As you know, the ringgit was affected in 2023, and that had an effect on our competitiveness, but now the ringgit has strengthened, and if the same momentum continues, the ranking should improve,” he added.

He added that the low contribution from the electrical and electronic (E&E) export sector last year also affected the country’s ranking.

The minister noted that exports of high-end manufacturing products, especially E&E, had declined last year, which affected its weightage.

“This was in tandem with the slowdown in trade worldwide, but this year we can see that the sector has improved.

“Now, the trade numbers have gone up quite considerably, by about more than 10 per cent in May 2024,” he said.

Malaysia has slipped by seven places to rank at 34th out of 67 countries in the IMD’s World Competitiveness Ranking 2024, after ranking 27th in the index last year.

In the Asia-Pacific region, Malaysia slid by four spots to the 10th position out of 14 countries. — BERNAMA