The International Monetary Fund (IMF) predicts that Malaysia will grow moderately this year with growth of 4.5%.
The IMF's executive board said in a statement on Thursday that national inflation will remain high at 3.3% in 2023 with continued pressure expected in core inflation.
He further said that Malaysia has recorded a strong recovery since the Covid-19 pandemic hit, driven by pent-up domestic demand and resilient exports.
Even so, the country's growth prospects in the near term are seen as bleak due to the risk of decline, which is largely due to external factors.
The global economy is now threatened with a sharp slowdown and recession due to ongoing political tensions leading to supply disruptions, increased input costs and other disruptions.
In the meantime, the IMF also urged Bank Negara Malaysia (BNM) to further tighten monetary policy and return to a 'neutral' stance.
According to him, tighter monetary policy will ensure that inflation expectations remain strong, in addition to creating room for monetary policy to respond to downside risks.
