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International Monetary Fund. Asia and Pacific Dept
Malaysia’s economic performance has significantly improved in 2024, supported by strong domestic and external demand. Disinflation is taking hold and external pressures have eased. The favorable economic conditions provide a window of opportunity to build macroeconomic policy buffers and accelerate structural reforms, especially as risks to growth are tilted to the downside amid an uncertain global outlook. Risks to the inflation outlook are tilted to the upside, including from global commodity price shocks and potential wage pressures.
International Monetary Fund
and
World Bank
This guidance note was prepared by International Monetary Fund (IMF) and World Bank Group staff under a project undertaken with the support of grants from the Financial Sector Reform and Strengthening Initiative, (FIRST).The aim of the project was to deliver a report that provides emerging market and developing economies with guidance and a roadmap in developing their local currency bond markets (LCBMs). This note will also inform technical assistance missions in advising authorities on the formulation of policies to deepen LCBMs.
International Monetary Fund. Asia and Pacific Dept
The 2023 Article IV Consultation highlights that Malaysia’s growth momentum has slowed but remains resilient to external headwinds. While monetary policy has paused its tightening cycle, fiscal policy is consolidating, and the ringgit had been under pressure through most of 2023. The government’s commitment to the reform priorities outlined in its national strategic plans is yet to fully materialize, with the economy’s path to high-income status being uncertain. In view of the lower yet solid growth, positive projected output gaps, limited fiscal buffers, and ongoing energy price liberalization, near-term macro policies should focus on maintaining an overall tight policy stance to safeguard price stability, while rebuilding buffers and continuing targeted support to lower-income segments. Structural reforms would support medium-term growth. The government faces the challenging task of implementing its well-crafted and concerted policy frameworks, which are appropriately focused on improving labor market outcomes and increasing incomes, addressing climate change, promoting digitalization, and enhancing governance.
International Monetary Fund. Asia and Pacific Dept
This 2023 Article IV Consultation discusses that Malaysia registered a strong economic recovery in 2022, backed by its well-diversified economy, sound policy frameworks, and commodity exporter status. While monetary policy started a gradual post-pandemic normalization, record costly spending on fuel subsidies broadly kept inflationary pressures suppressed in 2022. Meanwhile, the new national unity government has signaled its commitment to the reform priorities outlined in the Twelfth Malaysia Plan and the 2023 Budget to propel the economy toward net-zero greenhouse gas emissions and high-income status. In view of the positive output gap and ongoing inflationary pressures, near-term policies should focus on accelerating the pace of policy tightening, while managing downside risks and trade-offs. The financial sector remains healthy but warrants stepped-up monitoring, especially of highly leveraged entities and non-bank financial institutions, given increased risks from rising interest rates, tighter financial conditions, exchange rate depreciation, and weaker expected growth. Expanding the macroprudential toolkit should support these efforts.
International Monetary Fund. Asia and Pacific Dept
Malaysia’s economy is showing signs of a gradual yet steady recovery thanks to the authorities’ impressive vaccine rollout, swift and coordinated implementation of multi-pronged support measures. The recovery nevertheless remains uneven and the output gap sizeable, with significant downside risks. Going forward, the authorities should calibrate macroeconomic policies to the pace of the recovery, while preserving policy space given pandemic-related uncertainties, and simultaneously accelerate structural reforms.
Mr. Emre Balibek
,
Ian Storkey
, and
Hakan Yavuz
Cash and debt management operations are part of the “transactional” functions of public financial management. It is critical that these functions are resilient to external disruptions, ranging from information and communication technology (ICT) system outages to natural disasters. This technical manual aims to provide guidance on the steps that government cash and debt management units can follow to develop and implement a practical business continuity plan that economizes the resources used. It also discusses the evolving nature of business disruption risks faced by cash and debt management over the last decade, including the COVID-19 pandemic, as well as risk mitigation solutions that have emerged.