Malaysia not going into recession in 2023, last year’s GDP growth was highest since 2000: Central bank

KUALA LUMPUR: Malaysia will not go into a recession this year, central bank governor Nor Shamsiah Mohd Yunus said on Friday (Feb 10) as she announced that the country’s gross domestic product grew by 8.7 per cent in 2022.

This figure is the highest since 2000 when it was 8.9 per cent back then.

Mdm Shamsiah however warned that growth this year is expected to be at a more moderate pace after coming off a strong recovery last year.

“For 2023 growth, domestic demand will remain as a key driver of growth given the slowing global demand. I wish to stress that Malaysia will not go into a recession this year. 

“However, a highly challenging and uncertain global environment will remain the key risk to domestic growth going forward,” she said.

Moving forward, Mdm Shamsiah said the economy would benefit from the realisation of new and existing projects.

“Recent investment intentions remain forthcoming with approved investments totalling RM194 billion (US$44.83 billion) between January and September 2022.

“By sector, approved investments were mainly in real estate, information and communications, and electrical and electronics subsectors. The realisation of these approved investments will provide support to growth,” she said.

Mdm Shamsiah added that the slowdown in export growth following weaker global demand will be partially cushioned by improvement in exports of services, given further recovery in tourist arrivals amid the reopening of China’s international borders.

Malaysia's GDP grew by 3.1 per cent in 2021, after a 5.6 per cent drop in 2020 that was caused by the COVID-19 pandemic. 

Mdm Shamsiah also said that headline and core inflation averaged 3.3 per cent and 3 per cent respectively for 2022. 

She added that headline and core inflation are expected to moderate but remain at elevated levels amid lingering cost and demand pressures.

At the same press conference, Chief Statistician of Malaysia Dr Mohd Uzir Mahidin said that although the economy last year surpassed the pre-pandemic level of 2019, three main sectors of the economy were still below the pre-pandemic level - mining and quarrying, construction and agriculture sectors.