Kuala Lumpur: The Malaysian economy is projected to expand by 5.8 per cent in 2022, as domestic and external demand recovers, the World Bank said in a report on Tuesday.
The growth is mainly driven by acceleration in private consumption, which is expected to grow at 7.2 per cent in 2022, according to the latest edition of the World Bank Malaysia Economic Monitor titled “Staying Afloat” launched on Tuesday.
Exports are projected to continue to expand, albeit at a slower pace of 4.5 per cent, in line with the expected moderation in global trade growth, reports Xinhua news agency.
Growth is anticipated to be broad-based, with recovery across all economic sectors, said the World Bank.
The forecast for the year ahead follows growth estimates of 3.3 per cent in 2021, which remains clouded by several downside risks, including new Covid-19 outbreaks and weaker-than-expected global and regional growth.
The World Bank also foresees the Malaysian economy to grow at 4.5 per cent in 2023.
The World Bank noted that a resurgence of the pandemic, including through the emergence of new variants, could dampen economic recovery globally and domestically.
It said that ongoing disruptions to global value chains could also have a negative impact on Malaysia’s trade and manufacturing activities in the near term.
Given Malaysia’s deep integration with international financial markets, it said a more rapid than expected monetary tightening could have negative spillovers in the domestic financial market.
Increased vulnerability among affected households and businesses could also constrain growth, it added.
