Malaysia’s Economy Grows 5.6% Above Forecast

Feelings of Optimism as Malaysia’s Economy Grows 5.6% Above Forecast

Malaysia’s economy grows 5.6% above forecast in the first quarter of this year, thanks to expansions in private consumption and investments. Economists had predicted a 4.8% growth for annual gross domestic product from January to March.

The robust domestic demand will continue to drive Economic expansion in Malaysia. This will be further supported by a recovery in tourism, improvements in labour market conditions, and the continuation of large infrastructure projects.

It is safe to say that given how the economy grew 5.6% above forecast, it is no longer in a state of crisis. Experts believe the economy will only continue to strengthen moving forward.

 

Are There Any Risks to The Economy?

While the growth is positive, we can’t overlook some persistent risks. Inflation is one example, along with the 25-basis-point interest rate hike coming from the central bank recently.

Economists believe the rate hike marks the return of borrowing costs, the way it was before the pandemic. This only signals that the central bank’s tightening cycle is coming to an end.

 

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