PETALING JAYA: The positive appraisal of Malaysia’s economic reforms by the International Monetary Fund (IMF) has received kudos from a leading business group and economists.
The renowned organisation’s assessment was reflective of the right direction and progress of the government so far, they said.
Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) treasurer- general Datuk Koong Lin Loong said the assessment showed that the government’s reform initiatives were done right.
“With our narrow revenue base that is mostly derived from tax income, we are trying to rationalise expenditure, especially in areas where previous governments hesitated, such as in the rationalisation of subsidies,” he said in an interview yesterday.
Highlighting the government’s efforts in reforming civil sector salaries, pension schemes and fighting corruption, he said these sent a positive signal to foreign investors.
“They will see Malaysia as a potential trade hub for South-East Asia and even globally, in particular with the coming Trump 2.0 era. This IMF report is a positive note for Malaysia,” Koong added.
Malaysia University of Science and Technology economics professor Dr Geoffrey Williams expressed optimism on the government’s plans.
“The government is headed in the right direction and has made good progress, which will lay the foundation for further improvements in the coming years,” he said.
He said he was optimistic about Malaysia’s economic stability and growth, which was driven by robust domestic demand.
“With inflation at normal levels, stable interest rates, low unemployment and strong private consumption and foreign investment, the economy has returned to a stable macroeconomic environment,” he added.
Other positive pointers, he said, included moderately-rising government spending in line with inflation and revenue, and Bank Negara’s managing of the macroeconomic environment.
“Several areas still need attention, including targeted subsidies through the Central Database Hub (Padu), pension reform and the reform of healthcare and higher education funding,” he added.
Economist Dr Yeah Kim Leng said the IMF’s positive appraisal of Malaysia was expected to further boost investor confidence, adding that its affirmation of the country’s growth trajectory aligned with market expectations that the national economy will achieve about 5% growth this year.
“The slightly lower growth of 4.7% it projects for 2025 reflects a more challenging external environment.
“The favourable view accorded by the IMF to the structural and fiscal reforms under the Madani Economy framework should lend greater confidence to the government to pursue the enunciated reforms with renewed vigour,” he said.
On Sunday, the IMF commended Malaysia’s economic reforms, notably the introduction of the Public Finance and Fiscal Responsibility Act (FRA) 2023 and the successful implementation of electricity and diesel subsidy reforms.
It emphasised the need to accelerate these reforms to create a more inclusive and resilient economy in the face of global uncertainties.
Malaysia’s strong economic performance provided the country with an opportunity to advance its ambitious reform agenda, it stated.
The IMF said its views were based on its team’s preliminary findings after a visit to Malaysia recently.
It also noted that the current neutral monetary policy stance was appropriate and Malaysia’s financial sector remained sound with robust banks’ capital and liquidity positions.
