Gross domestic product grew by 5 percent in January-March, compared to 3.6 percent growth in the previous quarter.
Malaysia’s economy grew above expectations in the first quarter, the central bank said on Friday, backed by a recovery in demand and a stronger labor market.
Gross domestic product (GDP) grew by 5 percent in January-March compared to 3.6 percent growth in the previous quarter.
The governor of Bank Negara in Malaysia, Nor Shamsiya Mohd Yunus, said the central bank had taken the Russia-Ukraine war into account in its forecasts, and growth in 2022 would be supported by continued growth in domestic and external demand.
Adverse risks include Russia’s invasion of Ukraine and a severe blockade in China to stop the COVID-19 outbreak, as well as prolonged supply chain disruptions, Nor Shamsia said.
“Although the risks of a decline have increased on the global front, we are confident in our growth trajectory and do not see a risk of recession in Malaysia,” she told a news conference.
BNM maintained its forecast for economic growth for 2022 at 5.3-6.3 percent, which fell in March. Malaysia – which has witnessed some of the worst COVID-19 outbreaks in the region – lifted most of its coronavirus measures this month as the rate of infection slowed amid an intensified vaccination program.
On Wednesday, the central bank unexpectedly raised its reference rate to 2% from a historic low of 1.75%, citing a tighter domestic growth path, as well as inflationary pressures stemming from the conflict in Ukraine and disruptions in the global supply chain. .
“If the positive growth trajectory continues without any unexpected shocks, it would be appropriate for MPC [Monetary Policy Committee] to further reduce the level of cash accommodation, “she said.
Core inflation is expected to average 2.2-3.2 percent this year, unchanged from an earlier BNM estimate.
Deputy Governor Marzunisham Omar said that while there is price pressure, especially on food, inflation in Malaysia remains moderate compared to other countries.
“There is still some slowdown in the economy. We have control over the prices of fuels and other food products that help alleviate price pressures, “Marzunisham said, adding that longer-term solutions are needed to curb inflation.