KUALA LUMPUR: Malaysia's economy has recovered to pre-crisis levels, says Deputy Finance Minister Steven Sim.
According to Sim, Malaysia's economic growth hit 5.6% in the first quarter of 2023 as it surpassed a few of its regional neighbours.
"We surpassed the economic growth of Indonesia (5.0%), Vietnam (3.2%), China (4.5%) and Singapore (0.1%)," he said during a speech at the National Economic Forum 2023 in Kuala Lumpur Convention Centre on Thursday (May 18).
On the demand side, Sim said growth was driven by private sector expenditure following continued improvement in the labour market as well as public investment in various infrastructure projects.
On the supply side, commendable expansion was recorded across sectors with the services sector and manufacturing sector recording a 7.3% and 3.2% growth respectively, he added.
Despite the economic growth, Sim stressed that the Goods and Services Tax (GST) would not be implemented anytime soon.
"Lower income groups pay more tax as a ratio of their income compared to those of the higher income groups as based on a 2015 study by the Penang Institute.
"As such, now is not the time for GST as many are still recovering financially themselves from the multiple crises," he said.
He added that the government's fiscal policy would continue to focus on helping businesses grow but would prioritise stricter spending control.
"The first priority is ensuring there is sustainable growth momentum in our economy whether it'd be more investments or opportunities for foreign and local businesses.
"Once businesses are making money then we will focus on implementing more efficient and progressive taxation so that the benefits can be shared among the people.
"Lastly, once the country's revenue has increased, we will focus on practising greater fiscal discipline to ensure taxpayers' money is spent more prudently and transparently to prevent any corruption, leakages or wastages," he said.
