Malaysian economy on track for 4% to 5% growth, central bank governor says

KUALA LUMPUR — Malaysia's economy is on track to grow by between four per cent and five per cent this year despite the global energy supply shock from the Middle East conflict, its central bank governor said at a forum on Tuesday (July 28).

Economic growth will likely be towards the upper end of the forecast range as inflation remains manageable, Bank Negara Malaysia Governor Abdul Rasheed Ghaffour said.

The central bank will continue to play its part in maintaining price stability as global uncertainties persist and energy prices remain high, he said.

BNM's policy stance remains in line with the domestic growth and inflation outlook, Abdul Rasheed added.

BNM left its key interest rate unchanged at 2.75 per cent for the sixth straight policy meeting in July.

Headline and core inflation averaged 1.7 per cent and 2.1 per cent, respectively, over the first five months of the year.

Although energy prices have soared, the government has maintained subsidies for fuel and diesel.

The government may spend up to 40 billion ringgit (S$12.6 billion) on fuel subsidies this year, more than double its initial budget allocation, if energy prices remain elevated.

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