No economic downturn this year – Ahmad Maslan

PARLIAMENT | Deputy Finance Minister I Ahmad Maslan (BN-Pontian) has given his assurance that Malaysia will not be experiencing an economic downturn this year.

Based on the country’s economic growth performance in 2022, he said it is expected for Malaysia’s economy to grow by around 4.5 percent this year.

“In fact, the International Monetary Fund (IMF) and the World Bank also projected our economy growth rates at 4.4 percent and 4 percent, respectively.

“This expectation is in line with the forecast of economic growth and global trade which is projected to be slower this year.

“Based on these statistics, despite facing the challenge of global uncertainty, I wish to emphasise that Malaysia will not experience an economic downturn in 2023, God willing.

“The technical definition of economic downturn or recession is when a country’s economy experiences negative quarterly growth for two consecutive years,” he said during the oral question-and-answer session at the Dewan Rakyat today.

Ahmad (above) was responding to a question from Idris Ahmad (Perikatan Nasional-Bagan Serai), who asked the Finance Ministry to state the government’s plan for facing the economic downturn that is expected to occur this year.

‘Wait and see’ on OPR

Meanwhile, in Idris’ supplementary question, the PAS MP asked whether the Overnight Policy Rate (OPR) - currently at 2.75 percent - would be increased in the future.

However, Ahmad only responded with a “wait and see” reply, adding that the increase in the OPR rate had helped in curbing the country’s inflation rate.

“The OPR was lowered to 1.75 percent before this – during the Covid-19 pandemic – one of the reasons is to help the people, then the OPR had been gradually increased now (which) is 2.75.

“Half of it involves those who are subjected to fixed interest and the other half involves those who are subject to floating interest. The problem is those who are subjected to this floating interest, (where) they are burdened by the increase of OPR.

“The important thing is, with the OPR increase from 1.75 percent to 2.75 percent, that has successfully curbed the inflation rate (and) it is expected that the inflation rate this year will be 3.3 percent, lower than before.”

Later during the session, Ahmad said Prime Minister Anwar Ibrahim, who is also the finance minister, had ordered banking institutions which raked in high profits to initiate corporate social responsibility (CSR) projects for the people, especially those from the B40 community.

“This is the assistance that has been announced. Anwar may announce what other form of assistance that will be offered by the banks to help people in his winding-up speech.

“There was no announcement on the implementation of a windfall tax in the tabling of Budget 2023,” he said.

He was replying to a supplementary question by Mohd Shafie Apdal (Warisan-Semporna) who queried if the government have plans to introduce a windfall to banks which have garnered great profits due to OPR hikes since the easing of the pandemic. - Mkini