Malaysia’s well-diversified economy enables it to withstand risks from China’s slower economic growth as the country does not heavily depend on one particular trade partner or industry, said Bank Negara Malaysia governor Datuk Abdul Rasheed Ghaffour in a press conference after announcing Malaysia’s economic growth for the second quarter of 2023 on Friday (Aug 18).
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NewsTranscript
00:00 In terms of global growth, it's lower this year, and this is due mainly to the headwinds
00:12 from elevated cost pressure, high interest rate and also weaker goods rates.
00:18 But nonetheless, growth remains supported by our resilient domestic demand and also
00:23 strong labour market conditions and continued improvements in global tourism activity.
00:29 While China's reopening remains supportive of the global economy, its pace of recovery
00:34 has slowed in recent months.
00:36 We acknowledge that.
00:37 Nevertheless, the national economy is also well diversified in terms of product and trade
00:43 partners, therefore that will also cushion in terms of the impact that's coming from
00:49 China.
00:50 And I should also clarify that we have been rather conservative in our forecast for China,
00:56 and over the decades, as I mentioned just now, we have deliberately developed a highly
01:01 diversified economy and diversified trade partners.
01:04 And this means we don't rely too much on one particular industry or one particular trade
01:09 partner.
01:10 China is our second largest export market.
01:14 It only accounts for 13.6% of Malaysia's total exports.
01:18 There are others that also count higher.
01:20 And also in terms of relating to what you highlighted with regard to the global economy
01:24 and the risk to Malaysia, if you look in terms of our financial sector, they are also resilient.
01:30 Banks are lending to households and businesses.
01:33 And look at liquidity, it remains ample as well.
01:36 And we have the means to manage the volatility we see in the financial markets as well.
01:42 And lastly, another point I need to highlight is that our external positions remain strong,
01:47 with our current account surplus and also adequate international reserves.
01:51 These factors, together with the flexible exchange rate, will support our ability to
01:55 weather the external shocks that may hit the economy.
02:00 Regard to the questions on Manisa Bloomberg, on the GDP figure bottoming in quarter two,
02:07 how soon will we see recovery?
02:11 I think GDP growth in the second half of 2023 would have to average between 3.7% to achieve
02:19 the 4% lower bound growth for 2023.
02:24 Going forward, we see growth is expected to continue to be driven by expansion in domestic
02:30 demand, amid weaknesses in the external demand.
02:34 This will be supported by a few factors, Manisa.
02:38 One is in terms of the continued improvement in labour market conditions that we are seeing.
02:42 Continued progress of multi-year investment projects by both the private and public sector.
02:49 As I mentioned just now, the higher tourism activity will also further help us in terms
02:55 of the recovery in regard to not just tourist arrivals, but also in terms of travel receipts
03:00 towards the pre-pandemic levels.
03:04 And if you look at the supply side, growth will continue to be driven by the services
03:08 and construction sectors.
03:10 Thank you.
03:11 [End of Audio]