KUALA LUMPUR: The World Bank views Malaysia as a success story in terms of its strong economy and its emphasis on achieving its objective to become a high-income economy.
“Malaysia is a success story. It has a very strong economy and it is growing towards a high income economy,” said country director for Brunei, Malaysia, the Philippines and Thailand, Mara Warwick.
“The focus now should be on the quality of growth as well as the inclusiveness of growth. For example, the education system needs to better prepare young Malaysians for the future workforce so they can compete for higher paying jobs.”
Lead economist for World Bank Malaysia, Richard Record meanwhile said that it is important for the new Pakatan Harapan (PH) government to handle the ballooning debt of some RM1 trillion with prudence.
“It is important to note that the vast majority of the country's debt, about 97.7 per cent is in ringgit denomination and therefore have very limited risk,” he said.
“Also 70 per cent of this debt is medium term and has a maturity in the next three years. Therefore there are limited risk on rollover debt.”
When asked if the sales and services tax (SST) can help recover the expected revenue loss from the abolishment of goods and services tax (GST), Record said that remains to be seen.
“We are greatly anticipating the new SST, that we believe would be quite different from the previous one.”
Warwick, Record and Economic Affairs Minister Datuk Seri Azmin Ali had earlier launched the World Bank’s 18th edition of the Malaysia Economic Monitor.
Malaysia is expected to grow 5.4pct in 2018, underpinned by sound macroeconomics fundamentals and increase in employment and wages.