Report Summary

The Malaysian Economy in 2022 – The GDP rose 7.0% y/y in the 4Q2022 (3Q2022: 14.2% y/y), translating into 2022 annual GDP growth of 8.7% (2021: 3.1%) which was the highest level since 2000 when the economy grew by 8.9% then. Such a strong performance was supported on the back of full economic reopening, the lingering effects of pandemic fiscal policy support and robust external trades during the earlier part of the year. In 2022, private consumption and exports posted respective growth of 11.3% (2021: 1.9%) and 12.8% (2021: 15.4%).

On the supply side, the services sector recovered strongly, growing by 10.9% in 2022 (2021: 1.9%). Meanwhile, the manufacturing sector sustained its elevated momentum, growing by 8.1% in 2022 (2021: 9.1%). Development during 4Q2022 however, started to reflect the soft patch period among global economies as monetary policy tightening is taking its toll on growth.

The Outlook Ahead – The global GDP is expected to be slower in 2023, as major economies are still battling with inflation, which is impeding growth with mild global recession remains as our baseline view. On the domestic front, we expect growth to be supported by domestic factors. Private consumption will be the impetus for growth due to the improvement in the labour market, and stable inflation as well as robust consumer balance sheets to some extent. Overall, we expect GDP growth in 2023 to be at 4.5% on the back of 6.1% growth forecast for private consumption. This also signifies that no economic recession is expected for Malaysia.

Source: AmInvest Research - 13 Feb 2023