Higher 8.9% GDP growth due to reopening of economy, cutting unemployment, says PMO economic director

KUALA LUMPUR: The higher economic growth of 8.9% registered in the second quarter of 2022 is in part a result of Prime Minister Datuk Seri Ismail Sabri Yaakob's clear stance on opening up the economy and reducing unemployment rates.

The Prime Minister's Office economic director Shahril Hamdan also said the expansion of Malaysia's gross domestic product that was announced by Bank Negara on Friday (Aug 12) afternoon was made possible partly due to Ismail Sabri's assurance on having no more lockdowns.

"The Prime Minister deserves some credit for this 8.9% economic growth registered.

"His clarity on having no more lockdowns and opening up the economy, as well as focussing on reducing unemployment, has borne fruit," Shahril told The Star.

Shahril cited figures by the Statistics Department, which said on Aug 9 that unemployment now is almost at pre-pandemic levels.

The Umno information chief also said since Ismail Sabri took office in August last year, employment figures have gone up by more than 400,000, leading to increased wholesale and retail spending.

"Manufacturing output has also jumped significantly.

"Not to mention high approved investments over the last few quarters. These are all official, registered figures," said Shahril.

Nevertheless, Shahril said there will be challenges such as managing the surging inflation and combating high underemployment.

"The foreign worker shortage is also a major pain point we have to solve somehow.

"We also have to depend less on consumer spending for our GDP. But, at least we've ticked some really important boxes on the recovery path from the Covid-19 pandemic," said Shahril.

Shahril also said global headwinds are still strong with the ongoing Russia-Ukraine conflict, the global supply chain disruption and aggressive monetary policy tightening measures across the globe.

"But our recent macro numbers like the GDP figure announced on Friday (Aug 12) show that Malaysia possesses fundamental resilience to face these problems well," added Shahril.

On Friday (Aug 12), Bank Negara Malaysia said Malaysia's economy expanded 8.9% year-on-year in the second quarter of 2022, which was significantly higher than the median expectation of 6.7% growth by a Reuters poll of economists.

The improved performance, compared to growth of 5% in the first quarter of the year, brought the first half of this year's GDP growth to 6.9%.

Bank Negara governor Tan Sri Nor Shamsiah said the Malaysian economy is projected to expand further for the remainder of the year.

"While external demands could face headwinds from slower global growth, the Malaysian economy will continue to be supported by firm domestic demand.

"Growth would also benefit from improving labour market conditions and higher tourists arrivals as well as continued implementation of multi-year investments projects," she said.

She also cautioned that Malaysia's growth still depends on weaker global growth, geopolitical conflicts and worsening supply chain disruptions.

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