PETALING JAYA: Banks should provide greater access to financing to first-time homebuyers, as well as to small and medium enterprises in order to churn economic growth, says Finance Minister Lim Guan Eng.
“The financial health of Malaysian households is slowly recovering with the household debt-to-gross domestic product which has fallen to 83% in 2018 from 83.8% in 2017.
“As a result, consumers have more room to borrow for wealth accumulation purposes, either for saving schemes or for non-speculative investments including acquisition of long-term assets,” Lim said.
“Given the positive development, banks should provide greater access to financing to first-time homebuyers, as well as to SMEs in order to grease economic growth.”
According to statistics from Bank Negara Malaysia, the level of household financial assets is 2.1 times of the household debt, showing that households on average hold more assets than they hold debt, giving them the necessary buffer to face any financing contingencies.
Lim said inflation in April was low and stable at 0.2% due to the stabilisation of RON95 petrol and diesel retail prices.
According to the Department of Statistics Malaysia, retail sales rose 6.3% to RM41.6bil in April, from RM39.1bil a year ago.
“The overall wholesale and retail trade sales in April increased by 5.3% to RM105.1bil from RM99.8bil a year ago, indicating high consumer confidence.
“Together with strong industrial production expansion and a low unemployment rate, these suggest that the economy is expanding.
“Industrial production for April expanded 4% year-on-year, beating market consensus of 2.5% as compiled by Bloomberg,” Lim said.
The unemployment rate for April was 3.4%, unchanged from the previous month.