MARKET REPORT SUMMARY MALAYSIA ECONOMY MALAYSIA’S ECONOMIC RECOVERY IS EXPECTED TO GAIN MOMENTUM IN 2022 Malaysia’s economy is projected to grow by 5.8 percent in 2022 (2021f: 3.3 percent), driven mainly by a rebound in domestic demand. Private consumption growth is forecast to increase to 7.2 percent next year (2021f: 3.4 percent). This increased growth is premised on further relaxation of pandemic-related restrictions, dissipation of uncertainties, continued policy support, and gradual improvements to employment and income prospects. By contrast, growth in public consumption is forecast todecelerate to 1.3percent in 2022 (2021f: 3.9 percent) on expectations of reduced COVID-19 related expenditure and the government’s optimization of operating expenditure. Gross fixed capital formation is projected to grow by 5.1 percent (2021f: 2.5 percent), with the acceleration largely driven by a strong rebound in public investment. Projected public investment activity will be supported by the intensified implementation of major existing transportation infrastructure projects, including the Mass Rapid Transit Line 2 (“MRT2”), the Light Rail Transit 3 (“LRT3”), and the Pan Borneo Highway and by the commencement of new projects, including the Mass Rail Transit 3 (“MRT3”). Private investment is also expected to improve in 2022, although at a more moderate pace than public investment. Malaysia’s trade is expected to expand at a more moderate pace in 2022. Exports are projected to continue to expand, albeit at a slower rate at 4.5 percent next year (2021f: 15.7 percent), in line with softer global trade ingoods. The prospects for services exports, particularly travel and tourism, are likely to remain relatively subdued until the pandemic is brought more firmly under control and cross-border travel restrictions are loosened considerably. Imports are forecast to grow by 4.8 percent in 2022 (2021f: 17.3 percent), with broad-based expansion expected across consumption, intermediate and capital imports, in line with stronger consumer spending and continued expansion in exports and investment activity. Headline inflation is projected to moderate in 2022, with the base effect of the higher domestic retail fuel prices dissipating. Underlying inflation is expected to be broadly contained over the near term in the absence of immediate domestic cost pressures. (Extracted from World Bank Group, Malaysia Economic Monitor: Staying Afloat, December 2021) CORPORATE OVERVIEW STRATEGIC PERFORMANCE THE DRIVING FORCES SUSTAINABILITY STATEMENT 057 GOVERNANCE STRUCTURE FINANCIAL REPORTS
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