Minister of Investment, Trade, and Industry Tengku Datuk Seri Zafrul Abdul Aziz is optimistic about Malaysia’s economic resilience in the face of potential recession in the United States (US), based on the country’s current performance.
He stated that despite rising unemployment in the US, Malaysia’s economic indicators, including controlled inflation rates and a projected growth rate of 5.8 percent for the second quarter, provide strong support.
However, he emphasised the need for the country to prepare for adverse situations by focusing on resilient industries.
“For us, as an open economy with a trade-to-GDP ratio of 130 percent, we must ensure our economy is diversified, not only in terms of products and GDP but also in markets,” he said.
He made these comments after the National Consultation Meeting on Green Trade, organised by Khazanah Research Institute and the United Nations Conference on Trade and Development (UNCTAD).
When asked if worsening conditions in the US could impact the recently announced National Semiconductor Strategy (NSS), he explained that the NSS is a long-term program extending to 2030.
“In the event of external shocks, we need to be prepared. However, remember that it is a long-term target with inevitable fluctuations but will ultimately progress. We focus on resilient industries, and the semiconductor industry is considered relatively resilient.
“This is due to the continued growth of artificial intelligence (AI), which will require microchips, energy, data centers, and more. Thus, it will not be significantly affected but rather become a necessity, much like water and electricity,” he said.
Earlier, Tengku Zafrul mentioned that green financing needs to be expanded to all companies in Malaysia, particularly small and medium-sized enterprises (SMEs), to foster the development of green industries and trade.
He noted that large industries, such as multinational corporations and major local companies, do not face financial issues.
“However, SMEs need financial support to meet upcoming stringent requirements, especially when exporting products to international markets,” he said.
He added that the government is discussing with various parties, including the financial and banking sectors, to focus more on loans supporting these companies.
Source: https://www.businesstoday.com.my/2024/08/12/malaysia-expected-to-withstand-possible-economic-downturn-in-us/