Given Malaysia’s deep financial and trade integration with the global economy, unresolved trade tensions, heightened protectionist tendencies among major economies, a sharper-than-expected slowdown in larger economies as well as volatility in the financial and commodity market pose risk to growth in the near term.

The report added that policy actions should aim to strengthen fiscal buffers, facilitate private investments and ensure adequate social protection for lower-income households given the uncertain external environment and subdued business confidence.

It said in the medium term, bold reforms and measures are needed, particularly to boost human capital and increase the level of public sector revenue.

“The government expects growth to be resilient in the face of a volatile external environment,” Economic Affairs Minister Mohamed Azmin Ali said in a video recording of his opening speech.

“While we navigate the turbulence, it is important that we remain focused on our pursuit towards becoming a developed nation, in line with our recent announcement of ensuring shared prosperity for all.”

Azmin is currently in Vienna, Austria, for the Opec ministerial level meeting.

In his speech, he said the economy remained resilient in the first quarter of 2019 despite the challenging geopolitical environment amid a global economic slowdown and the US-China trade war.

“We now depend more on domestic demand, especially private demand. This private consumption is expected to remain the mainstay of growth in the near future with continued stable labour market conditions,” he added.

He said RM45 billion is expected to be spent on over 4,000 development projects this year to ensure robust and sustained growth. These projects will continue into the following year.

“Together with the resumption of several large-scale projects, these measures will be our growth drivers for this year and next,” he added.

He also said the government would continue enhancing foreign direct investments as well as domestic investments, with an added emphasis on e-commerce.

He said the government had made improvements to reduce regulatory burdens and ease the cost of doing business, but that more remains to be done.

“Among the steps being undertaken is the removal of non-tariff measures.

“As of 2018, 668 measures have been reviewed under six ministries that had a total estimated compliance cost of RM2.96 billion, with a potential cost saving of RM739 million,” he said.