Malaysia's Economy Shows Resilience Amid Global Uncertainty
KUALA LUMPUR, Feb 25 (Bernama) -- Malaysia is on the right track to unleash its potential as its economy remains on a steady course, bolstered by government reforms and strong economic fundamentals, according to HSBC's ASEAN economist Yun Liu.
She said the country has demonstrated resilience in the face of global volatility, with positive indicators such as the ringgit being Asia's top-performing currency last year, 5.1 per cent gross domestic product (GDP) growth, and major technology (tech) investments.
She said political stability and policy reforms have also improved sentiment both locally and internationally.
While trade tariffs, particularly with the United States (US), pose potential risks, Malaysia's diversified export base helps to mitigate these concerns.
"Malaysia's improving long-term fundamentals will continue to create opportunities, especially in the electronics sector," said Liu in a report on Nikkei Asia's news portal.
Recent free trade agreements, including with the United Arab Emirates and the European Union, further enhance trade prospects.
The tech sector, particularly in Penang and Johor, is a key driver for foreign direct investment, positioning Malaysia as a critical player in the global supply chain.
"Recently, large commitments have also flocked into data centres in the southern state of Johor, right across from Singapore.
"This matters a lot to Malaysia in looking to release its full potential, not only in terms of growing its market share but also enabling the country to fulfil its ambition to climb up the value chain," she said.
Meanwhile, Liu said domestic consumption remained decent, thanks to a confluence of factors, including low inflation and subsidies, with significant investments in infrastructure projects across the country.
The government's fiscal reforms, including subsidy rationalisation, are setting the stage for long-term growth.
Malaysia’s collaboration with Singapore through the Johor-Singapore Special Economic Zone (JS-SEZ) highlighted the potential for cross-border cooperation to boost the economy.
As Malaysia navigates through uncertainty, its sound economic fundamentals and timely reforms position it for continued growth and ensure it remains a stable force in the region.
"If it plays its cards right, Malaysia can shine again," Liu added.
-- BERNAMA