THE Malaysian economy is expected to grow by 5.5-6.5% next year on the back of strong economic fundamentals and diversified structure, the government’s 2022 Economic Outlook report said.

The report, released ahead of the tabling of the national budget, said the continuation of the Covid-19 economic stimulus packages will have spillover effects and continue to boost the economy. 

“Nevertheless, the favourable outlook is predicated on other factors, including the successful containment of the pandemic, the effective implementation of the National Covid-19 Immunisation Programme implementation and strong global economic prospects,” it said. 

For 2021, the domestic economy is expected to chart a gross domestic product growth of between 3% and 4%.

The economy grew by 7.1% in the first half of the year, and the momentum of growth is expected to continue on in the second half of 2021 – especially in the fourth quarter when more economic and social sectors operate at full capacity. 

“The expected growth trajectory aligns with the successful vaccination programme under the national rollout and various stimulus and assistance packages to support the people and revitalise the economy,” it said. 

Monetary policy remained accommodative in cushioning the effects of the prolonged nationwide movement curbs while simultaneously stimulating economic recovery. 

“The policy also ensures that inflationary pressure remains manageable. The overnight policy rate and statutory reserve requirement were held steady during the first seven months of 2021 at 1.75% and 2.00%, respectively,” the report said. 

Backed by sufficient liquidity and capital buffer, the banking sector remains strong. The capital market, on the other hand, remained resilient, underpinned by ample domestic liquidity and supportive policy environment.

On the global front, the world economy is expected to rebound this year and moderate in 2022 after a sharp contraction of 3.1% in 2020 due to Covid-19. – October 29, 2021.