KUALA LUMPUR: Malaysia's economy remains resilient despite growing uncertainty over Middle East tensions, with the country's gross domestic product (GDP) expanding by 5.4% in the first quarter, says Economy Minister Datuk Seri Akmal Nasrullah Mohd Nasir.
He said strong domestic demand and steady economic activity continued to support growth, while exports, particularly in the electrical and electronics (E&E) sector, helped cushion the impact of external shocks.
"Thus far, the country's economic fundamentals remain resilient," he told the Dewan Rakyat on Monday (June 22).
Akmal said the crisis was not only pushing up oil prices but was also affecting logistics, shipping insurance, agricultural inputs, industrial raw materials and global supply chains.
He noted that Brent crude prices had risen 27.1% this year to an average of US$93.49 (RM388) per barrel, from US$60.85 (RM252) per barrel on Jan 2.
"As an open economy, Malaysia is not immune to these spillover effects. However, the government is closely monitoring developments and will assess whether early intervention measures are necessary," he said.
The minister said inflation remained moderate at 2% in May, compared with 1.9% in April.
He warned that sectors most exposed to the crisis included logistics, agriculture, food production, manufacturing, chemicals, plastics, packaging and pharmaceuticals.
Global freight costs have nearly doubled, while marine insurance premiums surged up to 16-fold at the height of the crisis, he added.
Malaysia could also face higher food production costs as 63% of its fertiliser needs are imported. Fertiliser prices are expected to rise by between 15% and 20%, while animal feed costs could increase by about 8%.
Akmal Nasrullah said the government was focusing on protecting consumers, stabilising supply and prices, supporting SMEs and strengthening long-term economic resilience through measures such as targeted subsidies and financing assistance.
To a supplementary question from Datuk Dr Richard Rapu @ Aman Begri (GPS-Betong), he said projects under the 13th Malaysia Plan (13MP) would proceed as planned despite the uncertainty.
He added that the crisis could also present opportunities to accelerate biodiesel adoption and boost higher-value economic activities.
