KUALA LUMPUR: The International Monetary Fund (IMF) has commended Malaysia’s economic reforms, notably the introduction of the Public Finance and Fiscal Responsibility Act (FRA) 2023 and the successful implementation of electricity and diesel subsidy reforms.
In a statement today, the global organisation also emphasised the need to accelerate these reforms to create a more inclusive and resilient economy in the face of global uncertainties.
“Malaysia’s strong economic performance provides the country with a window of opportunity to advance its ambitious reform agenda.
"The government’s structural reform plans under the MADANI Economy Framework are appropriately focused," it said.
IMF said its views were based on its team's preliminary findings after a visit to Malaysia recently.
It said the FRA marked a significant milestone for fiscal management and governance, pointing out that in the face of an increasingly uncertain global environment, there is a need to rebuild fiscal buffers, augment growth potential, and strengthen social protection while preserving macroeconomic and financial stability.
As for economic growth, IMF noted that Malaysia's economic performance has significantly improved in 2024, supported by strong domestic and external demand.
Nevertheless, growth is projected to moderate from 5.0 per cent in 2024 to 4.7 per cent in 2025, reflecting a moderation in investment growth and the rising global uncertainty.
"Risks to growth are tilted to the downside, mainly due to the uncertain global outlook, including external risks from deeper geoeconomic fragmentation.
"Meanwhile, upside risks could arise from the faster-than-envisaged implementation of large investment projects in Malaysia," it added.
IMF also noted that the current neutral monetary policy stance is appropriate and Malaysia’s financial sector remains sound with robust banks’ capital and liquidity positions. - Bernama
