Nation's economy looks to be stable this year, says Ahmad Maslan

  • Nation
  • Monday, 06 Mar 2023

KUALA LUMPUR: Malaysia will not face economic turmoil this year despite looming global uncertainties, says Deputy Finance Minister Datuk Seri Ahmad Maslan.

He said based on last year’s economic growth, Putrajaya expects economic growth of 4.5% this year.

Ahmad also noted that the International Monetary Fund and the World Bank projected Malaysia’s economic growth at 4.4% and 4.1% respectively.

ALSO READ: Malaysia's inflation slows to 3.7% in January

“This projection is in line with (expectations for) this year.

“Based on these statistics (and) the uncertain global challenges, I want to stress that Malaysia, God willing, isn’t going to face economic turmoil this year,” he said during Question Time in Parliament on Monday (March 6).

Ahmad also explained that an economic recession happens when a country faces negative economic growth for two consecutive financial quarters.

The Pontian MP also said the government strives to make Malaysia an interesting investment destination by facilitating processes, as well as creating innovative companies and jobs.

This year alone, Ahmad said Putrajaya allocated RM64bil in subsidies and incentives, of which nearly RM8bil was earmarked for Sumbangan Tunai Rahmah, from which nine million Malaysians are expected to benefit.

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He also said the government decided to lower taxes for micro-SMEs from 17% to 15% for the first RM150,000 of taxable income.

“The M40 were also assisted by the reduction of two percentage points in tax rates for those making between RM35,000 and RM100,000 annually.

“This will increase the disposable income of the M40 to up to RM1,300 a year,” he added when replying to Datuk Idris Ahmad (PN-Bagan Serai), who asked about the government’s plans for facing expected economic stagnation this year.

Idris also raised a supplementary question on whether the overnight policy rate (OPR) would be raised again in future.

Ahmad said the OPR was lowered to 1.75 percentage points during the Covid-19 pandemic and it has since been gradually raised to 2.75 percentage points.

Ahmad noted that as of December last year, 50.3% of the household borrowings were those involving fixed rates, representing 6.4 million household loan accounts.

ALSO READ: Malaysia not going into recession, growth set to continue in 2023: BNM Governor

“Those whose rates are floated are facing issues on the rise of OPR,” said Ahmad.

“Will the OPR be increased in future? Let’s wait. Most importantly, the rise in OPR from 1.75 percentage points to 2.75 percentage points has successfully curbed (the) inflation rate,” he said, adding that inflation for this year is expected to be 3.3%.

Mohd Shahar Abdullah (BN-Paya Besar) then asked about the bankruptcy rate.

Ahmad said data from the Insolvency Department showed that bankruptcies had gone down from 19,588 cases in 2016 to 5,695 cases as of last December.

“(Cases among) youths below 35 also showed a trend of reduction,” he said.

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