KUALA LUMPUR, Dec 30 — MIDF Research expects Malaysia’s gross domestic product (GDP) growth to moderate to 4.2 per cent in 2023 after registering a strong growth of eight per cent this year.
It anticipated a sustained growth in domestic spending, in line with growing labour demand and increased employment as well as easing inflation, which will be the key factors to support Malaysia’s growth next year.
“Growth in the first three quarters of this year has been remarkable, facilitated by the reopening of the economy and the better-than-expected post-pandemic recovery in domestic economic activities.
“Looking at the recent trend indicated by the leading index, we priced in moderation in growth momentum from the fourth quarter calendar year 2022 onward and we believe the diminishing low base effect will also result in a more normalised growth rate,” MIDF Research said in a note today.
The research house said given the recent concerns, external demand could ease as final demand, especially from advanced economies, is expected to weaken as a result of policy tightening carried out to contain inflationary pressures.
In addition, risks of elevated inflation, a possible recession and heightened geopolitical tensions could also drag down the global economy and further weaken the outlook for Malaysia’s external trade.
— Bernama
