According to a recent poll, Malaysia’s economy expanded by double digits for the first time in more than a year in the third quarter, driven by strong domestic demand and healthy exports. However, the future is uncertain due to the possibility of a global recession.
Malaysia reported a trade surplus of $6.7 billion in September, the greatest in more than 20 years, as exports experienced significant double-digit growth of 30.1%, driven by increased shipments of electronics, oil, and gas products amid high prices.
22 economists participated in a survey from November 1–8 and expected that the economy would have grown 11.7% in the quarter between July and September relative to the same time last year. The economy expanded by 8.9% in the last quarter.
In its most recent budget estimates, the Malaysian government raised its growth projections for this year from 5.3 per cent to 6.3 per cent to 6.5 per cent to 7.0 per cent but predicted that growth would fall from 4.0 per cent to 5.0 per cent by 2023.
A slowdown in global growth and China’s severe COVID-19 containment efforts were also predicted to have an impact on trade and economic activities.
According to a different poll, Malaysia’s growth would average 7.2% this year before dropping to 4.2% in 2023.
Despite the central bank gradually raising interest rates to “pre-emptively” moderate pricing pressures amid a strengthening U.S. dollar, Malaysia’s ringgit has underperformed this year, which has had an impact on inflation.
Until U.S. bond yields peak and market participants become less risk-averse in the face of rising levels of global economic uncertainty, the currency is likely to continue to be under downward pressure.
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