KUALA LUMPUR – Malaysia’s economy is projected to grow at 4% to 5% this year, Bank Negara Malaysia governor Datuk Shaik Abdul Rasheed Ghaffour said.
Support for growth will come from domestic demand and improvements in the external sector, where Malaysia is a dominant player in the global semiconductor industry.
Rasheed also pointed to approved investments of US$70 billion (RM329 billion) last year, of which 57% was foreign direct investments.
“Almost 74% of the projects approved between 2021 and 2023 have also been realised,” he said in his speech at the virtual Islamic Finance Symposium, organised by FitchRatings, today.
On further growth potential, the country’s National Energy Transition Roadmap and the New Industrial Master Plan will bolster the manufacturing sector through flagship catalytic projects.
“Given its scale, the implementation of these two plans is estimated to require both public and private financing of about US$210 billion by 2050.”
Rasheed added that the central bank was fully committed to ensuring the ringgit’s stability by sustainably increasing inflows into the foreign exchange market.
The central bank has stepped up engagements with government-linked companies and government-linked investment companies to encourage more consistent repatriation and conversion of their foreign investment income, he said.
“We are also stepping up our engagements with international investors to showcase the positive prospects of Malaysia and (so) that the country remains highly attractive for investment and business.
“Thus, with the current ringgit undervaluation and ongoing and forthcoming investment opportunities, global investors stand to reap the benefits from participating in Malaysia’s growth prospects.”
Rasheed also said that the ringgit had been under pressure since 2022, largely influenced by the aggressive policy rate adjustments by the US Federal Reserve, a phenomenon not specific to Malaysia but reflecting broader currency market dynamics.
“Given our positive growth prospects, the current ringgit level is undervalued. This is unwarranted, as the ringgit is also supported by sustained investor confidence, evidenced by the stable long-term government bond holdings by non-residents at around 22%, and recent foreign inflows into domestic equities,” he said. – March 6, 2024