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KUALA LUMPUR: The resilience and competitiveness of Malaysia's economy hinges on national stability, which is achieved through social cohesion and policy predictability, economists said.
Dr Geoffrey Williams said national stability included stable prices, strong growth and a predictable policy environment to allow businesses and households to maintain spending plans.
He said as a small open economy, Malaysia was exposed to global challenges and had little influence over such developments.
"When there is a significant change in the global economy, such as the United States tariffs, Malaysia must rely on domestic economic resilience whilst navigating the global changes."
Williams said the Malaysian economy was currently in good shape, with inflation under control, growth at sustainable levels and its finances in sound position.
"This allows companies to remain stable even if they have to adjust their business model or prices in line with global conditions to remain competitive. The domestic stability sees them through the challenges," he added.
In general, Williams explained that a flexible policy framework was key to surviving external shocks.
"The policy environment should be stable but also agile enough to adjust. Having multiple policy options is important... Bank Negara has many tools and does not rely only on interest rates.
"Being prepared to end policies that are no longer useful because the world has changed is essential to safeguarding national economic stability," he said.
Meanwhile, Putra Business School economic analyst Dr Ida Md Yasin believed that economic stability was founded on the basis of a stable society, citing how the uncertainty in Gaza could affect the Middle East.
She said it was unrealistic to expect a challenge-free environment, but what mattered was preparedness.
"We must always have a plan B... like during Covid-19, we had a plan to revive the economy as fast as possible," she added.
Ida said the nation should adopt a risk management approach similar to that used by corporations.
"We cannot stop what happens outside the country... but what is important is for a nation to be able to face the challenges and come up with plans for its revival," she added.
Yesterday, Prime Minister Datuk Seri Anwar Ibrahim said Malaysians must prioritise maintaining the country's stability to effectively face global challenges, ensuring the nation's resilience and competitiveness.
He said the recent move by United States President Donald Trump to impose tariffs was a reminder on the importance of maintaining the country's stability to ensure the economy was resilient in face of challenges.
Source: https://www.nst.com.my/news/nation/2025/04/1204804/malaysias-resilience-achieved-through-social-cohesion-policy