SME Bank: 1H23 SME Sentiment Index shows that MSMEs remain resilient

  • SME
  • Tuesday, 06 Jun 2023

SME Bank president/chief executive officer Datuk Aria Putera Ismail.

KUALA LUMPUR: The micro, small, and medium enterprises (MSMEs) sector remains sustained as a whole after the first half (1H) 2023 SME Sentiment Index survey generated a positive reading of 52.9, according to SME Bank.

Group president and chief executive officer Datuk Aria Putera Ismail said the index findings showed that business owners are still optimistic, resilient and adaptive although the results recorded were slightly lower than 2022’s reading of 53.8.

"The 1H index reading is in line with the country’s economic slowdown foreseen this year where SME Bank, as well as the Ministry of Finance and Bank Negara Malaysia, also expected Malaysia’s gross domestic product to continue growing between a range of four per cent year-on-year (y-o-y) to five per cent y-o-y, moderating from 8.7 per cent y-o-y in 2022,” he said in a statement today.

Meanwhile, chief economist Lynette Lee said 45 per cent of the respondents, predominantly the micro and small enterprises, foresaw a slowdown in the economy over the next six to 12 months.

"By sector, the moderation primarily stems from various sub-sectors within the services industry, namely electricity, gas, steam and air conditioning supply (utility), real estate and retail,” she said.

"However, she said 44 per cent of the medium and large size businesses anticipated further expansion in economic activities.

"This disparity in expectations reflects the varying circumstances and challenges faced by businesses of different sizes,” she said.

She said the bank also remained cautious about the developments on both domestic and external fronts.

"The tighter global monetary policy environment, mounting geopolitical tensions, elevated inflation and risk of recession in certain advanced economies could have spillover effects to the domestic economy and derail our recovery trajectory,” she added.

The survey, conducted from January to May 2023 garnered more than 700 respondents from various sectors and sizes of MSMEs.

The index serves to gauge MSMEs’ view of the business environment which can be the yardstick in measuring how the overall economy is expected to behave. - Bernama

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