Our country is not in a crisis, but the future will be challenging, says BNM governor

By: Patrick Beech

Our country is no longer in a crisis. This was emphasised by Bank Negara Malaysia (BNM) governor, Tan Sri Nor Shamsiah Mohd Yunus recently who also said that economic recovery is well underway.

However, she did acknowledge that the future will be challenging, highly uncertain and unpredictable.

"As a country, we must now focus on strengthening our economic fundamentals, resilience and flexibility.

“Our neighbours within the region are actively pressing on with reform measures. We run the risk of being left behind if we do not act now,” she said.

Overall, she said wages in both the manufacturing and services sectors have been increasing since early this year at a rate of between 5 and 7 percent.

She also noted that unemployment in the country was now less than 4 percent.

Despite her optimistic view on the outlook, Nor Shamsiah acknowledged that rising geopolitical tensions and conflicts, global inflationary pressures and extremely volatile financial markets will lead to slower growth in 2023.

However, she also pointed out that the fundamentals of the local economy and financial system are strong.

“The preemptive policy measures taken will help us to weather this storm,” she said.

With regard to the weakening ringgit against the US dollar, Nor Shamsiah said it is not a reflection of the state of the economy.

“The exchange rate is only one indicator among many. It is important to consider the strength and positive performance of the Malaysian economy.

“Growth is robust, the labour market is healthy and the financial system is resilient and continues to perform its role effectively,” she added.