SC: MALAYSIA TO RECORD 4.5-5.5 PCT REAL GDP GROWTH PER ANNUM UNTIL 2023

KUALA LUMPUR, Sept 21  -- Malaysia is expected to continue exhibiting moderately strong growth potential over the medium term thanks to its diversified economy, with the real Gross Domestic Product (GDP) growth projected to be between 4.5 per cent and 5.5 per cent per annum, during 2021-2023, the Securities Commission (SC) said.

It said with the global economy recovering post-pandemic, external demands and exports are expected to rebound and further contribute to economic resilience.

“Malaysia is forecast to cross into the high-income country threshold as early as the middle of this decade,” the SC said in its Capital Market Masterplan 3 report released today.

It said the ongoing pipeline of large-scale public transportation and digital infrastructure projects will also boost economic growth and attractiveness as a foreign direct investments destination.

The regulator said that for the country to evolve with global megatrends, achieve its growth potential and transcend its status as a middle-income country, several priority areas would require emphasis – some of which have been exacerbated by the pandemic.

“Of these, there are two critical ones which the capital market can enable – the structural upgrade of the economy and the augmentation of the retirement savings landscape.

“The next phase of Malaysia’s economic transformation would be focusing on strong and meaningful shifts within the economy to be more productive and technology-driven and as the pandemic recedes in the future, this structural change will be critical to support Malaysia’s longer-term economic growth and the livelihood of all Malaysians,” it said.

The SC noted that it is essential for the economy to cultivate and build internationally competitive, home-grown enterprises which are strongly embedded within global value chains, aided by high value-added technological developments to drive structural transformation.

This would require more effective resource allocation towards the internationalisation, digitisation and technological upgrading of Malaysian firms, especially unlisted mid-tier companies (MTCs).

Today, according to the commission, the core intermediation of the savings-investment channel, dominated primarily by the banking system and government-linked investment companies, has not been able to serve these segments of companies meaningfully.

 The conventional equity and bond markets mainly cater to listed companies, which contribute to only an estimated 15 per cent of GDP, resulting in a shortage of access to capital within the wider economy.

“To cater to the broader needs of enterprises in the economy, including MTCs and micro small and medium enterprises, Malaysia would require a more inclusive capital market – one that provides a more comprehensive financing ecosystem across the spectrum of funding needs.

“To that end, the SC could strengthen the scale and maturity of the alternative markets ecosystem to cater for higher-risk capital and to see greater deployment of patient capital through market-based financing for national development,” it said.

-- BERNAMA