Malaysia’s strong growth momentum is expected to continue in the near term, with the economy projected to expand by 4.7% this year, according to the International Monetary Fund (IMF).

The IMF said favourable economic conditions would present an opportunity to strengthen macroeconomic policy buffers and accelerate structural reforms.

“Malaysia’s external position in 2024 is preliminarily assessed to be stronger than the level implied by medium-term fundamentals and desirable policies,” said the IMF.

“Fiscal consolidation should continue to rebuild buffers and meet the medium-term targets set under the Fiscal Responsibility Act (FRA),” it added in a statement issued in Washington yesterday.

The IMF welcomed the historic enactment of the FRA and called for its swift and thorough implementation.

The IMF also recommended achieving a small structural primary balance by 2027.

Building on successful subsidy reforms, including for electricity and diesel, it advised gradually phasing out the remaining fuel subsidies.

Inflation, which eased to 1.8% last year, is projected to rise to 2.6% this year, according to the IMF.

Source: The Star