KUALA LUMPUR: Despite a robust 5.3% economic growth in the first quarter, the government is bracing for downstream inflationary pressures as global geopolitical tensions begin to disrupt supply chains.
Economy Minister Akmal Nasrullah Mohd Nasir said while Malaysia’s economy remains resilient, the country cannot afford to be complacent.
“Rising input costs will have a knock-on effect on the prices of everyday goods.
“Inflationary pressures extend far beyond fuel prices. For example, if there are issues with the cost of fertilisers, it will impact the overall production costs,” he said.
To cushion the blow and delay the impact on consumers, Akmal Nasrullah said the government has put strategic buffers in place.
“We provide incentives for planters to ensure that agricultural activities can continue seamlessly.
“At present, we have strong inventories and supplies. However, when there is an increase in input costs like energy or raw materials, there will be downstream implications,” he said.
The minister was asked to comment on the broader economic outlook following the recent uptick in inflation, which rose slightly from 1.4% in February to 1.7% in March.
He said that the rate remains manageable compared to global standards due to policies implemented by the government.
“Inflation must be evaluated based on the basket of goods. Global geopolitical tensions are beginning to impact energy supplies.
“So we are seeing early signs of disruptions spilling over into other supply chains,” he said, adding that the government would monitor and evaluate the situation closely so that early preparations can be made.
On the country’s overall economic performance, Akmal Nasrullah said the government remains positive on the outlook.
“Malaysia has better resilience compared to others. The process of improvement must be continuous.”
Citing the energy sector, he said the government is taking a highly practical approach to upgrade the biodiesel mandate from B10 to B15 by focusing on operational capabilities rather than just relying on long-term facility development plans.
Last week, the Department of Statistics Malaysia released its advanced estimates, projecting the economy to grow by 5.3% in the first quarter of this year.
Chief statistician Datuk Seri Mohd Uzir Mahidin said the manufacturing sector maintained positive momentum in the first two months of the year with output expanding by 7.3% and 4.2% respectively, largely driven by export-oriented industries.
