In 2022, Malaysia’s economy recovers steadily thanks to improved labor conditions, increasing trade with foreign countries, etc. However, according to some research agencies, Malaysia faces such challenges as a sluggish economy and weaker exports in 2023.
The Bank Negara Malaysia, Malaysia’s central bank, said the Malaysian economy expanded by 9.3 percent in the first three quarters of 2022. It projected the overall GDP growth will be between 6.5 percent to 7 percent for the whole year, compared with 3.1 percent for 2021.
In September, the World Bank raised Malaysia’s 2022 economic growth forecast to 6.4 percent from 5.5 percent previously. The World Bank said in its report that Malaysia’s economic growth will be supported by strong domestic demand, which is underpinned by continued improvements in labor market conditions, and tourism-related activities by domestic and international travelers.
In terms of foreign trade, statistics from the Ministry of International Trade and Industry showed that for the period of January to November 2022, trade expanded by 29.9 percent compared to the same period last year. Exports increased by 27.2 percent, imports rose by 33.3 percent, and the trade surplus edged up by 2.6 percent.
On the other hand, due to the spillover effects of the U.S. Fed raising interest rates, Malaysia suffered from high inflation. In the third quarter, the inflation rate was 4.5 percent. In September, the ringgit slid against the U.S. dollar, breaching the all-time low that was recorded during the Asian Financial Crisis period in 1998.
Looking ahead, several research agencies worry that an expected world economic slowdown and weaker global demand will bring challenges to the recovery of the Malaysian economy in 2023.
A recent statement of S&P Global Market Intelligence showed that the seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers’ Index (PMI) posted at 47.9 in November, down from 48.7 in October.
According to Malaysia’s central bank, the country’s economy is expected to expand by 4 percent to 5 percent in 2023.
Analysts pointed out that China is an important trading partner of Malaysia, and China-Malaysian economic and trade cooperation will continue to play an important role in the development and transformation of the Malaysian economy.
The Malaysian Investment Development Authority showed that for the first three quarters of 2022, Malaysia attracted approved foreign direct investments of 130.7 billion ringgit (29.7 billion U.S. dollars), among which China dominated with 49.2 billion ringgit (11.17 billion dollars).
Malaysian Transport Minister Anthony Loke Siew Fook recently said that Malaysia looks forward to further strengthening economic cooperation with China. Chinese enterprises contribute a lot to the economic and trade prosperity between Malaysia and China. Under the Belt and Road Initiative, a large number of high-end and cutting-edge Chinese enterprises entered Malaysia, injecting vitality and hope into prosperity and development of Malaysia.
He also said that Malaysia encourages and welcomes more high-tech, energy-saving and eco-friendly Chinese enterprises to come to Malaysia to help with industrial transformation and upgrading. It is expected that Chinese enterprises will make more contributions to Malaysia’s economic development in terms of technology transfer and job creation.