Slower growth, coupled with the impact on Malaysia’s trade of a predicted slowing of the global economy, would result in reduced household incomes. This meant, he warned, that incomes would not be able to keep pace with the rising cost of living.
Johari (BN-Titiwangsa) said: “Our 2022 GDP growth (8.7%) was encouraging. In terms of percentage, some said it was the fastest growing economy among Asean countries.”
But there was a need to look at GDP growth between 2017 and 2019, before the pandemic, to get a clear picture of current economic growth, he said when participating in the debate on the Yang di-Pertuan Agong’s address in the Dewan Rakyat.
Then, on average, the economy grew 5% annually, but from 2020 to 2022, the GDP only grew an average of 1.9% each year.
He said this meant Malaysia was lagging behind Singapore, Indonesia and Vietnam as the economies of all three nations recovered in 2021.
“But, in Malaysia’s context, in 2021, we still had not recovered after our economy contracted in 2020.
“That is why in 2022, our economy grew 8.7% because of the low-base effect of 2021.
“What is more worrying is that GDP growth for the fourth quarter of 2022 showed a decline of 2.6% compared with the third quarter of 2022,” he said.
Johari said this trend was worrying, given the World Bank’s forecast that Malaysia’s economy would only grow by 4% this year and 3.9% next year, which was still lower than the pre-pandemic average of 5% annually.
On the other hand, the World Bank’s forecasts for Indonesia, the Philippines and Vietnam are higher at between 4.8% and 6.5%.
“These figures should concern us, as a government, to see how we can reverse this trend,” he said.
He also noted that both the International Monetary Fund and the World Bank were predicting global economic growth to slow down, and that this also had an impact on the economies of South Korea and Japan, which were expected to contract.
Both countries were major trading partners of Malaysia, he said, adding that this would also affect the nation.
“Slower economic growth will impact economic activities and job creation, resulting in reduced household incomes in a way that cannot keep pace with the rising cost of living.
“This is what happens when the economy does not grow,” he said.