KUALA LUMPUR, March 26 — Malaysia’s institutional and fiscal reforms based on the principles of competency, accountability and transparency are already bearing fruit, said Finance Minister Lim Guan Eng.
He said the clearest affirmation of this was the country retaining its credit ratings of A-/A3 by Fitch, Moody’s, and Standard & Poor’s.
“These achievements do not come without hard work, as policy clarity, certainty and consistency provided by a government are engendering confidence in the economy among investors and the business community,” Lim said during the launching of the WeChat Pay service.
He said despite the low usage of e-wallet services in Malaysia for now, WeChat’s owner Tencent is betting on the country’s tremendous growth potential, which it shares with other investors.
“Approved foreign direct investment (FDI) across all sectors rose 48 per cent to RM80.5 billion in 2018, compared to RM54.4 billion in 2017.
“Furthermore our exports in January expanded by 3.1 per cent year-over-year (YoY) supported by manufacturing, whereas the industrial production index in the same month grew by 3.2 per cent YoY,” he said.
Lim explained the expansion demonstrated the health of the national economy, and these positive trends will help the government achieve its GDP growth target of 4.9 per for 2019, in spite of considerable external challenges.
“Our role as a safe haven amid the United States-China trade war contributes towards the rising investment. As evidence, approved manufacturing FDI from China rose 410.8 per cent to RM19.7 billion in 2018 from RM3.9 billion in 2017.
“At the same time, approved manufacturing FDI from the US grew by 184.9 per cent to RM3.2 billion, from RM1.1 billion in 2017,” he said.
Lim said another move to implicitly stimulate the economy is the return of RM37 billion in Goods and Services Tax and income tax refunds to the economy after years of delay, which he said will improve cash flow and encourage businesses to spend and invest more than it would otherwise.
“Our policy to address living costs faced by Malaysians is also working, with the Consumer Price Index declining by 0.7 per cent YoY in January and a further 0.4 per cent YoY in February due to changes in our tax system and cheaper petrol prices,” he said.
Separately Lim also clarified ongoing confusion on social media over the RM60 commemorative banknotes, which were released in 2017 by Negara Malaysia to celebrate the 60th anniversary of the Federation of Malaya’s formation in 1948.
“There were rumours stating that these commemorative RM60 notes would replace the existing RM50 bills. Let me assure the public that the rumour is completely false. Your RM50 bills will continue to be valid and so, please use it with confidence.
“Although the notes are legal tender, I advise you not to use it and instead put it somewhere for safekeeping since it is only limited to 60,000 pieces, and no more will be produced,” he said.