THE government remains confident it can meet its gross domestic product (GDP) forecast of 4-5% for 2023 as the domestic economy remains vibrant with many indicators showing healthy trends, Prime Minister Anwar Ibrahim said.

Anwar who is also the finance minister said to support the momentum of domestic growth, the government maintains its responsive fiscal policy and will continue to focus on expediting the realisation of approved investments and accelerate implementation of government projects.

“Despite global economic challenges, Malaysia’s economy remains resilient and continues to improve.

“Inflation fell from 2.8% in May to 2.4% in June 2023, and unemployment achieved a new post-pandemic low of 3.4% in June 2023, down from 3.5% in May,” Anwar said in a statement issued by the Finance Ministry (MOF).

According to the MOF, Malaysia’s domestic inflation in June 2023 was tamer compared to countries such as the United Kingdom (7.9%), the Philippines (5.4%), Singapore (4.5%), Indonesia (3.5%) and the United States (3%).

The MOF said domestic demand bulwarked the Malaysian economy in the second quarter of 2023 (2Q 2023), against the backdrop of a cooling global trade.

The 2Q 2023 GDP which expanded by 2.9%, bringing the first half (1H) of 2023’s growth to 4.2%, is in line with the government’s growth forecast of 4% to 5.0% for 2023.

Domestic demand remained resilient in the second quarter registering a 4.5% increase while Malaysia’s total trade contracted by 11.3% to RM643.4 billion in 2Q 2023, it said.

“Public and private expenditures were also instrumental in anchoring the Malaysian economy in 2Q 2023, as they grew by 4.6% and 4.5% respectively.

“On the supply side, Malaysia’s economic expansion in 2Q 2023 was underpinned by growth in the construction, services and manufacturing sectors.

“The construction sector recorded the strongest performance, soaring 6.2% in the quarter, followed by services (4.7%) and manufacturing (0.1%),” it added.

In the meantime, the MOF said external demand for the second half (2H) of 2023 will continue to be affected by global vulnerabilities.

This includes geopolitical tensions, the continuing supply chain disruption, tight monetary policy to address global inflation and the growth prospects of major economies, many of which are Malaysia’s leading trading partners.

Meanwhile, the ministry said in line with the Madani Economy framework, upcoming policy documents, namely the New Industrial Master Plan 2030, the 12th Malaysia Plan Mid-term Review and Budget 2024 will further set out strategies and measures to restructure Malaysia’s economy and deliver inclusive development for the rakyat.

“Focus areas include improving business, promoting quality investments to generate higher-income jobs, ensuring good governance and investing in better public services and infrastructure towards improving the quality of life for the rakyat,” said the ministry. – Bernama, August 18, 2023.