Highlights from Bank Negara Malaysia’s 2022 reports

KUALA LUMPUR, March 29 — The following are the highlights from Bank Negara Malaysia (BNM) Annual Report 2022, Financial Stability Review for the second half of 2022 (2H 2022), as well as Economic and Monetary Review 2022 released today:

  • Malaysia’s economy is expected to grow between four and five per cent in 2023 versus 8.7 per cent in 2022, as it will continue to face challenges, particularly slower global growth that is expected to weigh on exports.
  • The construction sector is expected to grow 6.3 per cent in 2023, followed by the services sector (up five per cent), manufacturing (four per cent), mining and quarrying (two per cent) and agriculture (0.7 per cent).
  • Malaysia’s headline and core inflation are projected to average between 2.8 and 3.8 per cent in 2023.
  • Private consumption is projected to grow at a moderate pace of 6.1 per cent in 2023 against 11.3 per cent in 2022, while investment is to grow 5.8 pct in 2023 versus 7.2 per cent previously.
  • Public consumption is expected to grow at a slower pace at 1.3 per cent in 2023 against 3.9 per cent in 2022, while investment is to grow seven per cent in 2023 from 5.3 per cent last year.
  • In 2023, the unemployment rate is expected to improve to 3.5 pct, with more broad-based expansion in income.
  • Gross exports are projected to expand modestly at 1.5 per cent in 2023 from 25 per cent in 2022, while gross imports are expected to slow down to 1.1 per cent in 2023 from 31.3 per cent in 2022.
  • Further recovery in inbound tourism and moderation in import growth will continue to provide support to net export growth.
  • The current account of the balance of payments is expected to register a continued surplus of 2.5 – 3.5 per cent of gross domestic product (GDP) in 2023 from 2.6 per cent in 2022.
  • The Monetary Policy Committee’s (MPC) monetary policy considerations will focus on managing inflation risks while supporting sustainable economic growth in 2023.
  • The banking system remained well-capitalised throughout the second half of 2022 (2H 2022), bolstering the bank’s capacity to support lending activity and absorb unexpected losses.
  • More than 80 per cent of Buy Now Pay Later (BNPL) users earn less than RM3,000 a month in 2022, and therefore, are more susceptible to financial stress.
  • The insurance and takaful sector is expected to remain resilient, supported by strong capital and liquidity positions.
  • BNM governor Tan Sri Nor Shamsiah Mohd Yunus said the central bank will continue to ensure that the financial sector remains a source of strength for the Malaysian economy.
  • Strong capital and liquidity buffers have enabled banks to continue lending to the economy while extending help to borrowers who are still struggling.
  • As the pandemic recedes further into the rear-view mirror, it is critical that Malaysia stay the course in implementing reforms that will allow it to secure its future.