KUALA LUMPUR (Oct 14): Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said that the nation is on the cusp of recovery.
"Despite challenges, I am confident that we are on the cusp of recovery, driven by the National Recovery Plan (NRP), the upcoming Budget 2022, and the recently announced 12th Malaysia Plan," he said during his special remark during the InvestMalaysia 2021 on Thursday.
Tengku Zafrul pointed out several factors that showed that green shoots of recovery have emerged in the economy, such as the stronger gross domestic product growth in the second quarter of 2021, improvements in the labour market with unemployment rate improving to 4.6% in August 2021 from 5.3% at the height of the pandemic, a 6.8% year-on-year (y-o-y) increase in manufacturing sales value to RM126.5 billion as at August 2021 and a 23% y-o-y increase in exports to RM97.3 billion in August 2021.
He also said that the capital markets have demonstrated continued improvements, with some RM2 billion net inflow from foreign investors in the equity capital markets for August and September as well as how Malaysia attracted high-value, high-tech investments amounting to RM107.5 billion in foreign direct investment and direct domestic investment in the manufacturing, services, and primary sectors in first half of 2021, that showed close to 70% increase over the same period last year.
Tengku Zafrul said that the overall domestic economy is expected to be fully reopened by the end of this year, before resuming to pre-pandemic growth in 2022.
Malaysia's growth rate has been projected at 5.8% and 6% by the World Bank and IMF, respectively.
"The pathway to recovery begins with the NRP. Introduced in June this year as a comprehensive approach to preserving lives while allowing the economy to open safely, the NRP will set the nation firmly on the path to recovery.
"The next evolution of the NRP will prepare Malaysia for the next normal of living with Covid-19 as an endemic disease," said the finance minister.
Separately, he mentioned that the pathway to recovery will continue with Budget 2022, which will be expansionary in nature and at the same time lay the foundations for the government's wider and longer-term reform efforts.
He also shared some emerging thoughts based on the ministry's engagement sessions that have taken place so far, among which include continuing budget initiatives to the Sustainable Development Goals.
He said that financial assistance will remain ongoing for those most impacted, especially the B40 group, the unemployed and the vulnerable while support for businesses will remain steadfast be it via affordable financing schemes, better access to credit or grants, to support operations while pivoting them towards increased automation and digitalisation.
"There will be increased focus on sustainability and improving the resilience of our environment and water assets, following increased focus towards ESG, net zero emissions targets and further development of our circular economy.
"We will improve the labour market by, amongst others, focusing on hiring incentives in addition to subsidising wages; and finally, we will be enhancing fiscal prudence by improving the government's procurement and debt management process while enhancing tax enforcement measures," he said.
Budget 2022 will be tabled on Oct 29, 2021.
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