Malaysia will not experience economic downturn this year

KUALA LUMPUR - The Finance Ministry has given its assurances that Malaysia will not experience economic downturn this year, despite facing challenges of economic global uncertainty.

Its Deputy Minister Datuk Seri Ahmad Maslan said this is based on the economic turmoil or recession's definition which states it is a situation where a country experiences economic contraction, which is a negative quarterly growth twice in a row.

He said based on the economic growth performance in 2022, the government expects Malaysia's economy to grow around 4.5 per cent this year.

"In fact, the International Monetary Fund (IMF) and the World Bank also expects Malaysia's economic growth rate in 2023 to be at 4.4 per cent

"This prediction is in line with the expected slower global economy and trade growth this year," he told the Dewan Rakyat today.

He said this when answering a question from Datuk Idris Ahmad (PN - Bagan Serai) who asked about the government's plan in facing recession expected to happen this year.

The Pontian MP added that the government will continue to prioritise the country's economic growth and fair development for the people.

He also said the government is building Malaysia as a more attractive investment choice by simplifying the investment process, creating more highly innovative start-up companies and creating more job opportunities with commensurate income.

"For this year alone, the government has allocated up to RM64 billion in the form of subsidies, aid and incentives.

"For example, the Rahmah Cash Aid (STR) which involved almost RM8 billion cost, is expected to benefit almost 9 million Malaysians with a maximum aid value up to RM3,100.

"Under the Rahmah Initiatives agenda, the government is helping to reduce the cost of living through the Menu Rahmah programme and Rahmah Sales, which offer essential goods of up to 30 per cent cheaper than the market prices," he said.

Ahmad said for the micro, small and medium enterprises (MSMEs) sector, the government also provides various grants, incentives, loan facilities and finance guarantees with an allocation of almost RM40 billion in an effort to help these groups to get back on their feet and to stay competitive after they were affected by Covid-19.

He said the government also reduced MSMEs tax rate from 17 per cent to 15 per cent for the first RM150,000 taxable income.

"The M40 group is also aided through the two percentage points cut for each taxable income ranging between RM35,001 to RM100,000.

"The cut is expected to increase the disposable income of the M40 group of up to RM1,300 per year," he explained.