Malaysia poised to withstand US recession – Tengku Zafrul
12 Aug 2024
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz expressed confidence in Malaysia’s ability to withstand a potential recession in the United States (US), citing the nation’s recent economic performance as evidence.
Despite rising unemployment in the US, Tengku Zafrul highlighted several positive domestic economic indicators.
These include controlled inflation and a second-quarter growth forecast of 5.8 per cent, which contribute to an optimistic outlook for Malaysia.
However, he emphasised the need for Malaysia to prepare for worst-case scenarios by focusing on resilient industries.
“As an open economy with a trade-to-GDP ratio of 130 per cent, we must ensure our economy is diverse, not just in terms of products and GDP, but also in our markets,“ he told the media today.
Tengku Zafrul made these remarks following the National Consultation Meeting on Green Trade, organised by Khazanah Research Institute in collaboration with the United Nations Conference on Trade and Development.
When asked if the worsening situation in the US would impact the recently announced National Semiconductor Strategy (NSS), Tengku Zafrul clarified that the NSS is a long-term programme extending until 2030.
“If there is an external shock, we need to be prepared. However, it’s important to remember that this is a long-term target. There will be fluctuations, but the overall trajectory will remain upward.
“We are focusing on resilient industries, and the semiconductor sector is particularly robust. The growing use of artificial intelligence (AI) will continue to drive demand for microchips, energy, and data centres, making these resources as essential as water and electricity,“ he said.
Earlier in his speech, Tengku Zafrul highlighted the importance of extending green financing to all companies in Malaysia, particularly small and medium enterprises (SMEs), to foster industry development and green trade.
“Large corporations, including multinationals and major local companies, do not face financial challenges. However, SMEs require financial support to meet upcoming stringent requirements, particularly when exporting to foreign markets,“ he said.
He added that the government is in discussions with various stakeholders, including the financial and banking sectors, to prioritise loans that support these companies.
Source: Bernama
