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BUSINESS

Juwai IQI: Strong oil and gas market lifts Malaysian economy in 2022

10/05/2022 12:01 AM

KUALA LUMPUR, May 9 (Bernama) -- Strong oil and gas and higher commodity prices will bolster the Malaysian government’s balance sheet, leading to more infrastructure investments, which will directly correlate with gross domestic product (GDP) growth, said Juwai IQI group co-founder and group chief executive officer Kashif Ansari.

In a statement today, Kashif said higher revenue would reduce the budget deficit, giving the government more room for fiscal manoeuvring to manage future crises.

“We expect oil prices to remain high as demand is still very strong. This will be good for Malaysia. The International Energy Agency (IEA) forecasts that global demand for crude oil in 2022 will surpass the levels of the past two years.

“By 2023, it will surpass that of 2019 and will continue to climb. The IEA expects demand of 99.4 million barrels per day (b/d) in 2022, 101.2 million b/d in 2023, and 103.2 million b/d by 2025,” said Kashif.

He also said that palm oil accounts for 6.5 per cent of total exports, with March exports of palm oil and related agriculture products amounting to RM8.52 billion, 56 per cent higher than a year ago. Indonesia’s palm oil export ban will also help Malaysia to further increase its market share.

Meanwhile, Juwai IQI also  expects 2022 GDP to be between 4.0 per cent and 5.0 per cent, a significant achievement in a likely environment of slower global growth.

“We are buoyant about Malaysia’s economic outlook due to the commodities super cycle, which we expect to last at least the next six quarters,” said Kashif.

He added that the Malaysian government has made progress in restoring macroeconomic stability with policies that have supported considerable growth over the last 17 months.

However, Kashif said 2022 would still be a challenging year due to fallout from geopolitical issues, the COVID-19 pandemic, and supply chain disruptions would weigh on the Malaysian economy as with its trading partners.

“The government is assuming these factors will reduce Malaysia’s GDP by 0.2 per cent.

“When the economy grows and employment grows, the residential market also tends to perform well. Rising interest rate expectations may prevent house prices from climbing too quickly. The number of transactions and demand for housing is likely to increase significantly,” he added.

--  BERNAMA


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