Country's economy 'on right track' amid global stock market fall, says minister

The country’s economy is on the right track amid the significant yet temporary fall in the Malaysian and global stock markets, said Finance Minister II Amir Hamzah Azizan.

This he said, despite the nation’s economy facing the potential impact of recession in the US.

“The ‘real economy’ is what matters. Malaysia is indeed strong in terms of gross domestic product (GDP).

“We are on the right track and God willing, (our economy) will continue to grow,” he told reporters after officiating the Retirement Fund Inc’s (Kwap) Inspire conference in Kuala Lumpur, today.

Amir (above) was asked to comment on the possible impact of the US recession on the country’s economy and the significant drop in stock markets globally since last week.

“Several events occurred, including projections from the US, which saw a slight increase in the unemployment rate, causing confidence to decrease.

“There is also an expectation that the US will lower interest rates. We see that there are stakes taken, therefore the market is down because of the settlement (sale) taking place.

“We also see that sometimes investors take ‘trading positions’ and ‘resettle trading positions’, so the market goes down because of the ‘resettlement’ that takes place,” he said.

Amir noted that the Statistics Department’s projection that the country’s economy will grow five percent in the first half of 2024 is higher compared to the Finance MInistry’s expectation of four to five percent.

“That’s why the ringgit is rising, not only because the US wants to lower interest rates but also because of good policies developed by the government.

“We see that there are many good developments and the level of confidence has also increased,” he said.

Govt’s policies working

Economy Minister Rafizi Ramli said the strengthening ringgit shows the government’s policies are bearing fruit.

He said the government expects the first US interest rate cut, which is expected to happen in early September, to further strengthen the ringgit’s position.

“This proves that the government’s policy direction is working, and is beginning to attract the attention and renewed confidence of investors.

“The unity government’s commitment to tough fiscal reforms and comprehensive economic planning has resulted in a new narrative of economic growth,” Rafizi said in a statement on social media today.

Economy Minister Rafizi Ramli

Given the trajectory, Malaysia’s economy is expected to grow by 5.8 percent by the second quarter of this year, he predicted.

“The ringgit has outperformed the US dollar for 10 consecutive days - its best performance in 14 years. So far, the ringgit has strengthened by 2.16 percent against the US dollar.

“The ringgit has outperformed several major international currencies such as the British pound, the Chinese renminbi, and the euro. The ringgit is the only currency in Asia that has strengthened against the US dollar,” Rafizi added.

Earlier, the media reported that the ringgit maintained its upward trend for the 10th day in a row last Friday, reaching a 14-month high of RM4.49 against the dollar.

The situation is in line with the Finance Ministry’s expectation that the local currency will trade at RM4.50 against the US dollar at the end of this year, as a result of the country’s positive economic position. - Mkini