The World Bank Group announced today that the rising interest rates in the US will not impact Malaysia as severely compared to other East Asia and Pacific (EAP) countries.
Key Highlights
- It is reported that Malaysia has several factors reducing the severity including flexible exchange rate, low US dollar-denominated external debt, large international reserves, and a deep domestic institutional investor base.
- Moreover, promising recovery prospects with the economy opening up and recent Bank Negara Malaysia's (BNM) increase of its policy rate helps to prep in the event of future rate hikes.
- Meanwhile, Malaysia’s gross domestic product (GDP), is projected to expand 5.5% in 2022 compared to 3.1% in 2021, as reported by the World Bank.
- The World Bank also added that Malaysia’s private consumption growth is expected to reach 8.5% in 2022, its fastest pace since 2008.
- However, The World Bank said the Malaysia's consumer price index (CPI) is forecast to increase but will remain relatively manageable between 2.5% and 3.5% in 2022 based on the assumption that the ceiling on retail fuel prices and price controls on selected food items remain unchanged throughout the year.
