World Bank: Malaysia’s economic growth at 5.2%

PETALING JAYA: The World Bank projects Malaysia’s economy to continue growing at a strong pace of 5.2% in 2018, although slightly slower compared with the expected 5.8% growth this year.

The World Bank’s Malaysia Economic Monitor report issued yesterday said the 5.8% on-year growth would be the country’s highest annual growth rate since 2014.

“Accelerated growth has been fuelled by strengthening domestic demand, improved labour market conditions and wage growth, as well as improved external demand for Malaysia’s manufactured products and commodity exports. Capital expenditure has also increased due to higher private and public investment,” it said.

According to the report, Malaysia’s stronger-than-expected growth creates opportunities for deeper structural reforms that can lead to higher growth.

“These reforms include policies that enhance productivity and address constraints such as a lack of competition in key markets and critical skills deficits. Such policies will enable access to more remunerative employment and real income gains for lower-income families,” it said.

The World Bank report said its edition of the Malaysia Economic Monitor included a special focus on the Asian Financial Crisis 20 years on, its impact, management and lessons learned in Malaysia, the region and globally.

“Malaysia’s progress over the last 20 years owes much to the sound policies adopted during and since the Asian Financial Crisis,” said Ulrich Zachau, World Bank director for Malaysia, Thailand and Regional Partnerships.

“Continued sound macroeconomic management and further reforms to strengthen people’s skills, competitiveness and equal opportunities will help secure gains from Malaysia’s robust economic growth for all its people, especially low-income and lower-income families, through access to more and better jobs,” he said.

Meanwhile, Deputy Minister in the Prime Minister’s Department senator Datuk Seri S. K. Devamany pointed out that in 2017 Malaysia was significantly more resilient to external shocks and financial instability, having learned many lessons from the turmoil of 1997-1998. “Malaysia has learnt from the experience of the Asian Financial Crisis, and in the years since, successive reforms have helped transform the economy and propel it closer to high-income-country status.”