Rozanna Latiff & Mei Mei Chu

KUALA LUMPUR – Malaysia’s fourth quarter saw growth. The central bank is expecting that the recovery will be sustained this year despite any further disruptions resulting from the coronavirus epidemic.

Bank Negara Malaysia said that gross domestic product saw a 3.6% increase between October and December. That’s faster than the predicted 3.3% growth in a Reuters poll. It also rose from a 4.5% drop in the quarter before.

Malaysia’s year-end economic performance grew 3.1% in 2021. It rebounded from the 2020 drop of 5.6%, marking the country’s poorest annual performance since 1998 Asian Financial Crisis.

BNM indicated that Malaysia’s economic recovery would continue as a result of improved demand domestically and globally.

However, there are risks. This is mainly due to “severe” and “vaccine-resistant COVID-19 variations that may trigger new containment curbs both “globally or domestically,” Nor Shamsiah Mohd Yunus (BNM Governor) said in a news conference.

Malaysia’s COVID-19 case numbers have been increasing in recent weeks. The majority of these cases are due to Omicron, a highly transmissible variant of coronavirus.

However, the government has promised not to impose lockdowns in spite of an increased COVID-19 immunization programme.

Nearly 82% of the 32 million inhabitants of this country have had at least 2 doses COVID-19, with more than 33% having received boosters.

Alex Holmes, Capital Economics analyst, said that the effects of new infections should not be severe and short-lived due to high vaccine rates.

Malaysia’s plans to eliminate mandatory quarantine inbound traveller from March 1 will help boost economic recovery, he added.

Nor Shamsiah claimed that the headline inflation in Malaysia is likely to stay moderate for this year. He also denied speculations of Malaysia suffering from hyperinflation and stagflation.

She stated that the current monetary policies were appropriate and accommodative, and that BNM would not withdraw policy support prematurely.

To support recovery, the central banks left their key interest rates at an unprecedented low of 1.75% last month.

Malaysia projects a growth rate of 5.5%-6.5% in 2022.

Nor Shamsiah announced that revisions to this outlook and the central bank decision regarding digital banking licenses will be published on March 30.

BNM received 29 bids to get the licenses, and only five are expected to be granted.

($1 = 4.1840 ringgit)