The government is confident of achieving its economic growth forecast of 4.0 per cent to 5.0 per cent for 2023 despite the global economic challenges and uncertainties, supported by strong economic fundamentals and implementation of Budget 2023 measures, said Prime Minister Datuk Seri Anwar Ibrahim.

He said the government would continue to prioritise addressing the daily economic challenges faced by Malaysians while focusing on reducing wastage and tackling corruption.

On the economic performance in the first quarter of 2023 (1Q 2023), Anwar who is also the Finance Minister said that it was underpinned by broad-based growth across all sectors especially services and manufacturing, which grew by 7.3 per cent and 3.2 per cent, respectively.

“The economic expansion was supported by sustained domestic demand reflecting confidence in the economy, given strong private expenditure and improvement in labour market conditions,” he said in a statement released by the Ministry of Finance Ministry (MoF) today.

According to Bank Negara Malaysia (BNM), Malaysia's economy recorded a better-than-expected expansion of 5.6 per cent in 1Q 2023 driven mainly by private sector expenditure.

Commenting further, the ministry said Malaysia’s economy expanded 5.6 per cent in 1Q 2023, comparing favourably with regional growth such as Indonesia (5.0 per cent), China (4.5 per cent) and Vietnam (3.3 per cent).

“The 1Q 2023 growth performance contributed strongly towards the achievement of the 2023 whole year forecast of 4.0 per cent to 5.0 per cent.”

It noted that the 1Q 2023 growth also exceeded the 4.8 per cent growth achieved in 1Q 2022, while on a quarter-on-quarter seasonally adjusted basis, the economy grew by 0.9 per cent in 1Q 2023 compared to the contraction of 1.7 per cent in 4Q 2022.

Meanwhile, it said the labour market continued to record a positive growth momentum in 1Q 2023, maintaining its full employment level with 3.5 per cent unemployment rate against 3.6 per cent in 4Q 2022.

“Inflation rate in 1Q 2023 moderated to 3.6 per cent compared to 3.9 per cent in 4Q 2022 due to, among others, the government’s continued implementation of price control measures and consumer subsidies.

“Domestic inflation continued to trend downwards to 3.4 per cent in March 2023, which is much lower than some advanced and regional countries such as the United Kingdom (10.1 per cent), the Philippines (7.6 per cent), Singapore (5.5 per cent), the United States (5.0 per cent) and Indonesia (5.0 per cent),” it said.

Nevertheless, quoting the recent global economic forecast by the International Monetary Fund and World Bank, MoF said Malaysia’s gross domestic product (GDP) growth is expected to moderate in 2023 due to slower external demand as a result of weakening global trade.

“Geopolitical tensions, elevated price pressures and tighter financial conditions will also continue to affect world economic outlook,” it said.

On the domestic front, the ministry added that extreme climate occurrences such as current heat wave phenomena and expected El Nino season starting in June are expected to weigh on economic activities to a certain extent, especially on the agriculture and construction sectors.

Source: BERNAMA News Agency