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KUALA LUMPUR: The government is optimistic that Malaysia is on track to achieve 5.3% to 6.3% economic growth this year based on upgraded outlooks for the country by global analysts, said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz.

In March 2022, Bank Negara Malaysia (BNM) projected that the country’s economy will expand between 5.3% and 6.3% in 2022, driven by continued external demand and improved domestic economic activity.

Recently, global analysts such as S&P Global Ratings (6.1%), the International Monetary Fund (IMF) (5.75%) and the World Bank (5.5%) have upgraded their outlooks for Malaysia.

“This is again not just from me, the Ministry of Finance or BNM, but also S&P Global Ratings, which has upgraded the outlook for Malaysia; IMF, and the World Bank which validated the growth figures. For today, our target continues to be within that range,” he told reporters during the launch of EPF i-Lindung today.

Tengku Zafrul said Malaysia’s fiscal deficit is within the target of 6% and it is dependent on gross domestic product (GDP) growth. Since the economic growth is projected to be within 5.3% to 6.3%, the targeted deficit will continue to be in the same range. He added that the government will continuously monitor the situation.

Last week, it was reported that the IMF’s global outlook has “darkened significantly” since April and it could not rule out a global recession for 2023 due to the elevated risks.

Asked to comment, Tengku Zafrul remarked that the US, China and the global economy are under pressure and, based on global analysts, the forecast for the second quarter will be “quite bad” for the global economy. For Malaysia, he said, preliminary figures show strong second quarter growth and the country’s growth momentum will continue into the third quarter.

“For today, the numbers and data show that Malaysia continues to be on track to achieve the 5.3% to 6.3% growth. We have factored in the slowdown of the US economy.”

Tengku Zafrul said the government will monitor global growth. For now, based on the data, the growth projections remain unchanged because Malaysia’s economy is diversified, although it is uneven across sectors. So far, sectors such as oil and gas, palm oil and manufacturing are doing well.

As to whether Malaysia is ready for a global recession, he said the country, together with other countries, will have to be prepared for any eventualities.

Tengku Zafrul said the country’s fiscal space is better than in 2021, given the growth in the economy.

On inflation, he said the government is aware of the impact of what is happening globally on Malaysia. He added that the government recently increased Bantuan Keluarga Malaysia, which is the largest cash assistance thus far of RM8 billion.

“So the fiscal space is still there, we still need to continue and the government soon will be looking into ways to save money to ensure that, we can channel the money to the right people who needs the support from the government,” he said.

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