Economy Minister: Reforms 'very likely' to impact growth

The ongoing reforms undertaken by the Pakatan Harapan-led government are 'very likely' to impact Malaysia’s economic growth, Economic Affairs Minister Mohamed Azmin Ali said today.

He said this would also ensure a more sustainable growth in the future.

“The Malaysian economy, in general, is fundamentally strong, with all sectors performing well at the macro-level and supported by a stable and strong banking and financial sector.

“Sustaining the real economic growth will remain a priority for the government, with more focus given to humanising it to ensure a better quality of life for the people.

“This will be carried out simultaneously with the efforts to strengthen the government’s fiscal position. While it is very likely that the economic growth may be affected by the various reforms, it is expected that their impact is short-lived.

“This trade-off is necessary to strengthen the fiscal position of the government and return the economy to a sturdier position and sustainable growth path,” Azmin said in his opening remarks at the launch of the World Bank’s bi-annual Malaysia Economic Monitor Report for June 2018.

The new report maintains the previous report’s forecast that Malaysia’s gross domestic product (GDP) growth for this year will be at 5.4 percent, and says the growth will still be driven primarily by household spending.

The report also noted that the there had been RM19 billion in foreign capital outflows since the 14th general election up till the end of May while the stock market fell by three percent.

This was due to factors outside of Malaysia coinciding with uncertainty within Malaysia due to the election and the ensuing transition of power.

“However, since then, volatility in the financial markets has been largely driven by external factors amid increased global trade tensions. The uncertainty surrounding the political transition has gradually reduced,” the report said.

On a separate matter, Azmin said the ongoing shake-up in government-linked corporations (GLCs) would ensure that its executives are appointed based on their expertise and not for political expediency.

The government wants to ensure that GLCs meet the highest standards in term of corporate governance and best practices, he said.

“All the executives in GLCs must be appointed from among those who can perform efficiently and not because of political reward.

“So now, the Pakatan Harapan government and the prime minister has repeatedly said that we want executives who can serve because of their skills and expertise, not because of high, exorbitant allowances. This must stop.

“In the near term, I’ve had a series of discussions with the Council (of Eminent Persons) and the prime minister. We will identify those personalities who have the highest integrity and that they have the knowledge and credibility to lead those organisations,” he said. - Mkini