KUALA LUMPUR: Malaysia will continue to focus on the economic transformation process in the management of the economy to achieve a more equitable and balanced growth, says the Ministry of Finance.
The economy is expected to sustain the positive growth trajectory next year supported by improved global economic conditions and resilient domestic demand, said the ministry in its 2014-2015 Economic Report.
The report is issued in conjunction with the tabling of 2015 Budget in Parliament today by Prime Minister Datuk Seri Najib Razak, who is also Finance Minister.
Nonetheless, it said, as a highly open economy it remains vulnerable to external shocks.
It said the country needed greater trade diversification and investment to ensure the current account surplus and strengthen its external resilient.
“While the nation has made significant progress in economic performance, investment and international ranking in competitiveness, on the domestic front, several major issues need to be addressed, including income and regional disparities, rising cost of living and shortage of skilled labour,” it said.
The Economic Report said next year’s monetary policy will continue to support growth while mitigating risks to economic and financial balances that can undermine the long-term growth prospects.
“The fiscal measures will remain supportive of economic activity and reform initiatives even if it continues to further consolidate the federal government’s financial position.
“The policies to promote further people-oriented economy will be further emphasised to achieve inclusive growth with measures targeted more to the bottom 40 per cent of households and vulnerable groups,” it said.
It said fuel subsidy rationalisation and the increase in electricity tariff has contributed to inflationary pressure while the Goods and Services Tax implementation is expected to be a temporary one-off inflation spike.
The report said the government is committed to strengthening the economic momentum and would ensure the investment climate remains favourable to the business community while driving economic transformation and undertaking liberalisation measures.
The government will continue to improve Malaysia’s competitiveness by enhancing the investment environment, reducing regulatory burden, improving public sector service delivery and strengthening the country’s technological capabilities to achieve higher productivity growth, it said. – BERNAMA