World Bank forecasts Malaysia’s economic growth rate to remain at 4.3%, but sees possibility of upward trend due to rising oil prices

KUALA LUMPUR (April 22): The World Bank has left Malaysia’s economic growth forecast unchanged at 4.3% in 2024, but says rising oil prices due to ongoing conflict in the Middle East could be a potential upside. I’m watching.

According to Dr. Apurva Sanghi, the World Bank’s chief economist for Malaysia, gross domestic product (GDP) growth of 4.3% in 2024 will be driven primarily by private consumption. Malaysia’s economy grew by 3.7% in 2023, mainly supported by strong consumer spending.

“It is worth noting that most of this growth will come from domestic demand rather than investment. In fact, as a share of GDP, 3.4% will come from private consumption,” he said on Monday, according to the World Bank’s 2024 He was speaking at a media briefing on the occasion of the release of the Malaysian Economic Monitor’s report “Bending the Bamboo Shoot: Strengthening Basic Skills”.

Although investment is expected to account for only 0.9% of GDP, Apurva believes that its contribution will accelerate once the government starts initiatives under the New Industrial Master Plan (NIMP) 2030.

And the rise in oil prices could exceed World Bank forecasts.

“One of the upside risks is actually rising oil prices, and that is actually materializing. If you look at the tragic situation in the Middle East, oil prices are rising; From a pure financial point of view, it is good for Malaysia as it is a commodity exporter,” Apurba said.

“What should be noted is that if the risk of an increase in crude oil prices continues to materialize, the implementation of subsidy rationalization may be delayed, which could create downside risks,” he said.

“It is always difficult to change or rationalize subsidy targets when commodity prices are high,” he added.

At the time of writing, Brent crude oil, the global benchmark for crude oil, was down US$1.37 or 1.57% to US$85.92 per barrel.

Economists have previously raised concerns that the closure of the Strait of Hormuz, the world’s most important oil chokepoint, could lead to supply shortages. In 2022, approximately 21% of the world’s petroleum liquids consumption passed through the strait.

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