Finance minister says Malaysia’s economic fundamentals still strong, growth prospect bright

Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz in Parliament, July 26, 2021. — Bernama pic
Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz in Parliament, July 26, 2021. — Bernama pic

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KUALA LUMPUR, July 28 — Malaysia’s economic fundamentals are still strong and its growth prospect for the medium term is still bright, supported by a stable capital market, while the financial sector has ample liquidity and capital buffer, said Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz.

He said among the issues raised by the Members of Parliament during the Special Parliament Meeting were whether the investors’ confidence was affected following the Covid-19 pandemic in the country.

“A brief answer, no. Foreign investor confidence (is) still intact on Malaysia’s economic recovery prospects. Last month, international rating agencies such as Standard & Poor’s and Moody’s Investors Service gave ratings of A- and A3 respectively to Malaysia,” he said in the 63rd Implementation and Coordination Unit Between National Agencies (Laksana) report today.

Last week, Fitch Ratings also maintained Malaysia’s rating at BBB+.

“Such ratings are not given simply, especially not for a country that is considered a ‘failed’ state. Historically, the level of foreign direct investment (FDI) and business environment in the country remains stable amid the current political landscape.

“For instance, the government transition was done peacefully and orderly in 2018, while despite the political polemics in 2020, Budget 2021 was approved by the Parliament,” he said.

Besides that, he said foreign investors also have the confidence and belief in the strength of the country’s institutions, wherein the FDIs have shown an increasing trend.

For the first quarter of 2021 (Q1), the country recorded foreign investment inflows of RM9.1 billion, an increase of 33.8 per cent year-on-year (Q1 2020: RM6.8 billion).

 Malaysia also continues to receive various foreign investments totalling almost RM60 billion recently, from renowned international companies including investment from Microsoft amounting to US$1 billion (RM4.2 billion), Risen Energy Co Ltd (RM42.2 billion) and an investment of RM750 million by GIC Pte Ltd in Sunway Healthcare Holdings.

At the same time, Malaysia’s trade breached RM1 trillion over a six-month period, the shortest period it recorded to achieve this benchmark.

For the first-half of 2021, the total trade was worth RM1.056 trillion, an expansion of 26 per cent compared with the same period last year.

Exports rose 30.2 per cent to RM585.56 billion and imports increased 21.1 per cent to RM470.53 billion.

“This is the highest half-year value recorded for trade, exports and imports. Trade surplus also jumped 87.7 per cent to RM115.04 billion,” said Tengku Zafrul. — Bernama

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