Image credit: The Star
PUTRAJAYA: Malaysia’s economic growth in 2022 is likely to hit the highest end of the government’s 5.3% to 6.3% forecast, according to Prime Minister Datuk Seri Ismail Sabri Yaakob.
While many economists are projecting the economy to hit a soft path in the second half of the year, Ismail expressed optimism that the country’s recovery post-Covid-19 will continue for the rest of 2022.
Speaking during the closing ceremony of the Budget 2023 Consultation Council yesterday, the premier pointed out that the domestic economy has shown strong signs of recovery in the January-June 2022 period, with a gross domestic product (GDP) growth of 6.9%.
“The economic recovery momentum is not only about GDP growth but also labour market recovery whereby the unemployment rate reduced from a high of 5.3% in May 2020 to 3.8% in June 2022, as a result of the JaminKerja initiative with allocation exceeding RM4bil in Budget 2022.
“The confidence in the country’s economy is also obvious among international investors.
“For the first half of 2022, foreign direct investments recorded a higher net inflow of RM41.7bil compared to RM23.3bil during the same period in 2019,” he said.
Despite his optimism on the economy, Ismail cautioned that the country may face increasingly challenging global economic prospects next year.
This is because of the prolonged Russia-Ukraine conflict, disruptions in the global food supply chain and the move by central banks across the world to tighten their monetary policies.
“As an open economy, we are not sheltered from global developments. Global supply chain disruption has raised prices of commodities and food in a short span,” he added.
In view of the challenges expected in 2023, Ismail reaffirmed that Budget 2023 will focus on the welfare and well-being of all Malaysians.
The main priorities of the upcoming budget include creating employment opportunities, improving people’s income level as well as ensuring business continuity.
“In addition, in the face of global uncertainty, Budget 2023 will pay attention to Malaysians that need assistance by improving the social protection system and improving the well-being of the people through quality health and education services.
“The government is also focusing on creating a safe and comfortable environment by emphasising inclusive and sustainable development,” he said.
The Budget Consultation Council meeting yesterday was the first to be organised since 2020, following the pandemic.
The council provides a platform for direct interaction between the government and other stakeholders – such as government agencies, the private sector, academia, non-governmental organisations (NGOs) and civil society organisations – in the process of drafting the national budget.
A total of 242 organisations – including business chambers, academia and NGOs – have submitted 1,935 memoranda as the government seeks public opinion ahead of the tabling of Budget 2023.
In his welcoming speech for the event yesterday, Deputy Finance Minister Datuk Mohd Shahar Abdullah said Budget 2023 will be inclusive and beneficial to all segments of society.
He said Budget 2023 is focused on reform initiatives, especially through improving income and social protection, business competitiveness and value chains, as well as strengthening the country’s resilience against future shocks.
Budget 2023 is expected to be tabled in October.
According to Mohd Shahar, the Finance Ministry will continue to hold discussions and consultations nationwide to gather further input for the upcoming budget.
“So far, state tours have been made in Johor, Kelantan and Terengganu, in addition to the engagement session held in Putrajaya to obtain suggestions and aspirations from the people and industries.
“In the next few weeks, more engagement sessions and meetings will be held specifically to assess all the issues and suggestions presented today (yesterday),” he added.
Meanwhile, Mohd Shahar said the government will consider implementing a more targeted subsidy mechanism in order to ensure that the assistance reaches those who are truly in need.
At the same time, he said the government remains committed to ensuring the people’s well-being, including protecting households from the full impact of rising commodity and food prices worldwide.
“Following the government’s move to continue and enhance the subsidies, the expenditure for aid and subsidies is estimated to increase to RM77.7bil compared to Budget 2022’s allocation of RM31bil,” he said.
Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz was also in attendance at the meeting to chair the second session, which discussed issues about the implementation of Sustainable Development Goals, as well as public-private partnership.