Bank Negara Malaysia has lowered its gross domestic product (GDP) growth projection for the country at between 5.3 per cent and 6.3 per cent this year.
This is slightly lower than its projected expansion of between 5.5 per cent and 6.5 per cent earlier this year.
Governor Tan Sri Nor Shamsiah Mohd Yunus said in the central bank’s baseline forecast, Bank Negara was assuming that global growth would still remain above long-term average between 3.8 per cent and 4.3 per cent.
Nor Shamsiah said while the conflict in Ukraine had already affected global growth and trade activity, an open economy such as Malaysia would naturally be affected by the disruptions.
However, she said the impact to the country’s growth would be mitigated by its highly diversified economic and trade structure, which has always been its source of strength.
“For example, while increasing commodity prices is putting upwards pressures on commodity cost, as a net commodity exporter, Malaysia stands to benefit from increased commodity export earnings.
“We will continue to monitor this closely and update our assessment accordingly,” she told reporters after the launch of Bank Negara’s Annual Report 2021, Economic and Monetary Review 2021 and Financial Stability Review for second half 2021.
Bank Negara also projected the Brent crude oil price to range between US$100 and US$120 per barrel this year.
Meanwhile, the central bank said the country’s headline inflation was expected to average between 2.2 per cent and 3.2 per cent in 2022.
“While high input costs are projected to exert some pressures on selected fresh food prices, these pressures will be partly mitigated by price controls,” it said.
Bank Negara said core inflation was expected to average higher between 2.0 per cent and 3.0 per cent in 2022 due to stronger demand conditions amid lingering cost pressures.
“However, the extent of upward adjustments in core inflation will remain partly contained by the continued slack in the economy and labour market,” it added. – NST ONLINE
