Despite the latest projection from the International Monetary Fund (IMF) that casts a slower global economic growth projection in 2023, MIDF Research said Malaysia’s growth of gross domestic (GDP) is set to increase 4.5 per cent for this year and 2024.
MIDF Research said the growth rates would be underpinned by the resilience of both job market and slowdown of inflation data.
The firm said the downward revision by the IMF was primarily influenced by the recent financial market uncertainties in the United States and European Union (EU) as well as the unresolved war in Ukraine.
“Global GDP growth is still on expansionary trajectory particularly supported by the reopening of China and softening inflationary pressure,” it said.
The international body expected monetary policy to be tightened to mitigate inflation, deterioration in financial market conditions and geopolitical risks specifically in the EU.
“However, the IMF revised upwards for the United States and European area by 1.6 per cent compared to 1.4 per cent in January 2023 and 0.8 per cent compared to 0.7 per cent in January 2023 respectively.
“We opine the resilience of both the job market and softening inflation data are supporting the growth rates,” it said.
The IMF downgraded several key economies such as Germany, Japan and India, while maintaining its forecast for China at 5.2 per cent in 2023 and 4.5 per cent in 2024.
MIDF Research said the forecast wad slightly higher than the Chinese government’s GDP target of 5.0 per cent.
“The IMF expects the Chinese economy to enjoy the benefits of economic reopening and positive spill over effects to be spread across the region.
“In line with that, the IMF raised the Asean-5 forecast from 4.3 per cent to 4.5 per cent for this year,” it said. – NST ONLINE
