KUALA LUMPUR: Malaysia's economic growth this year has been revised to 6.5-7.0 per cent, surpassing the official estimates of between 5.3 per cent and 6.3 per cent.
The country's gross domestic product (GDP) has staged solid recoveries especially in the second quarter with an 8.9 per cent expansion, with expectations that the third quarter ended September will be even more solid.
Prime Minister Datuk Seri Ismail Sabri Yaakob, in disclosing the revised forecast in the Economic Outlook 2023, said the transition towards endemicity and reopening of Malaysia's international borders on April 1 were among the factors that would keep the growth momentum going throughout the year.
"As an open economy, Malaysia's growth prospects have been put at risk by the volatile external environment. Nonetheless, the country's diverse economic structure, sound fundamentals, and timely policy interventions helped the country achieve strong growth in the first half of 2022," Ismail Sabri said.
He said with Covid-19 inoculation rates reaching intended levels and the serious effects of the pandemic largely contained, more economic sectors and social activities were allowed to resume in the latter half of 2021, paving the way for solid growth in 2022.
"However, as we enter a new and promising year, the country was hit by major floods in December 2021 and January this year. The floods had a devastating impact, claiming many lives and causing billions of ringgit in property damage."
"Despite the losses, the disaster had strengthened our resolve to deal with adversity while teaching us the true meaning of unity, tolerance, and caring for one another, as demonstrated by the heroic and selfless acts of #Keluarga Malaysia from all races and walks of life."
The government, he said, had provided various forms of assistance to the rakyat and small businesses impacted by the floods.
Moratoriums on bank loans, discounts on vehicle repairs, grants for micro and informal businesses, direct cash transfers, and vouchers for the purchase of new furniture and electrical appliances are among the benefits.
Various ministries and government agencies have adopted the affected districts and conducted voluntary cleaning and repair work.
"The floods served as a stark reminder to all parties that a balance must be struck between development and the need to protect and conserve the environment. As a result, the Ministry of Finances establishment of the MySDG Foundation in January was timely and responded to calls for a greater emphasis on sustainable development."
The Foundation's mission includes, among other things, managing a trust fund with the United Nations and promoting sustainable development in line with the 2030 Agenda.
Ismail Sabri said the conflict in Eastern Europe had erupted while the government was rebuilding the country.
The conflict exacerbated existing issues such as supply chain disruptions and soaring commodity prices, raising concerns about global growth prospects.
As a result, the IMF and World Bank reduced their global economic forecasts for 2022 to 3.2 per cent and 2.9 per cent respectively.
"We are aware of the difficulties faced by Keluarga Malaysia as a result of rising commodity prices, which is a global phenomenon. Nonetheless, the government makes every effort to assist the rakyat, particularly the B40.
"In this regard, we increased the Bantuan Keluarga Malaysia cash assistance while continuing to implement price ceilings and provide discounts on selected essential goods and services, most notably through subsidies on certain food items, cooking gas, fuel, and electricity to offset the effects of rising living costs," he said.
Subsidy and social assistance expenses were expected to be RM78 billion this year, the highest in the country's history, he added.