Malaysian Economic Outlook 2022: Stability to stay – Chief Economist Juwai IQI

KUALA LUMPUR 25 April – The Malaysian economic outlook will remain stable despite challenges in the global economy.

Chief Economist Juwai IQI, Shan Saeed said the government has been able to maintain macroeconomic stability and trade achieves considerable growth. 

“We at Juwai IQI have shared in the market that GDP outlook for 2022 to meander around 4 to 5% with economy opening up,” he told DagangNews.com here today.

Shan said in response to the recent opening of the Malaysian borders to international travellers.

Malaysia fully reopened its borders on April 1, dropping quarantine requirements for people vaccinated against COVID-19 after two years of strict travel restrictions.

According to Shan, the Ringgit will also remain relatively stable against US dollar i.e 3.75 to 4.15 in 2022. 

Globally, he said commodity prices are on the upsurge and it would make impact on the economies. 

Malaysia's total trade recorded a double-digit growth of 27.3 per cent year-on-year (yoy) in March 2022 to reach a new high of RM236.6 billion according to MITI.

Export and import values in March once again broke the record for all-time monthly highs at RM131.6 billion and RM104.9 billion respectively.

Exports to major markets notably ASEAN, China, the United States (US), the European Union (EU) and Japan recorded double-digit growth.

Shan said highest export monthly value was registered to ASEAN, EU and Japan.

“Moreover, along with trade, economy has opened up to tourist with more than 98% of the population have got vaccinated,” he said. 

Touching on the oil prices, Shan said it is expected to stay higher with the demand curve to remain strong.

According to latest issue of Economist magazine dated March 26-2022 : Weeks of chaos in energy markets are beginning to hurt consumers.

Petrol prices in Los Angeles are over US$6 a gallon for the first time. As sanctions on Russia bite, traders predict, Europe will run short of diesel. Germany is preparing to ration natural gas next winter in case Russia cuts off supplies.

In Asia, oil importers are bracing for a balance­of­payments hit. In a tight market, shocks are hard to absorb. 

Yet even as markets respond, Shan said governments must also redouble their efforts.

Shan said oil prices are expected to meander around US$77 to US$117/barrel for the rest of the year.

Based on the premise that geo-political risk remains, production cuts to remain while dollar takes the beating in the next 2-3 quarters.

Nevertheless, he is confident that Bank Negara Malaysia has got sufficient room to manoeuvre to curb price inflation and bolster growth outlook in 2022.

“Overall, Malaysia remains stable and macroeconomic stability gets back in the calculus equation, he added. – DagangNews.com