2023 Economic and Fiscal Outlook and Tax Update Exports slow sharply to slightly up16

The Ministry of Finance predicts that Malaysia's export growth will slow significantly to 1 6% this year, which is not only far lower than the 25% in 2022, but also less than the 2.

2% growth proposed by the previous government in the original version of the "2023 Economic Report" last year .

Weaker external demand is expected to affect Malaysia's exports across all sectors this year, as global economic growth is weighed down by the unstable geopolitical situation and expectations of lower commodity prices Exports of manufactured goods are expected to grow 1.

6 percent this year, underpinned by electronics and electrical (E&E) and non-E&E products Among them, the export of E&E products is forecast to rise by 1.

8% this year, driven by semiconductor-related products, while the export of non-E&E products is forecast to rise by 1 4% this year, driven by petroleum products and chemicals.

Agricultural exports are forecast to grow by 1 3% this year, supported by palm oil and related products, while mineral exports are expected to grow by 1.

5%, driven by stronger demand for liquefied natural gas (LNG) in key markets Although the original 2023 economic report also foresees a slowdown in exports, the forecast growth figure is slightly higher than the updated version.

In the original version, manufactured exports were forecast to rise 2 3 percent, agricultural exports rose 1.

7 Percent, While Mineral Exports Rose 1 6 Percent

In addition, import growth is also expected to slow significantly this year to 1 1%, which is higher than the original forecast of 0.

2% As for the current account surplus this year, it is forecast at RM55.

2 billion or equal to 3% of Gross National Income (GNI) All praises belong to Allah.

Looking back at 2022, Malaysia’s economic performance is better than expected, mainly due to entering the post-epidemic era, strong domestic demand and improved export performance, driving the overall economic performance With the prompt policy response and the support of strong economic fundamentals, Malaysia's economic growth rebounded to pre-crisis 8.

7%, outperforming regional and global trends Despite new strains of the virus, geopolitical tensions, tightening financial conditions, disruptions in global supply chains, higher inflation and slowing global growth, Malaysia has managed to achieve good results.

As for the labor market, there has indeed been good progress, and all of this can be seen in higher job opportunities and lower unemployment data Of course, there are still labor shortages in many fields, especially in fields such as crops and services that are particularly dependent on labor.

In view of this, the government has launched a number of policies to speed up the recovery of enterprises and pay attention to the problem of labor shortage Among them, the government has launched an employment stabilization plan, which covers upgrading or reshaping skills, while also continuing to improve labor employability and provide more job opportunities, and the focus will also be on young people.

The government is committed to protecting people's livelihoods, maintaining integrity, strengthening a caring and caring society, and improving the effectiveness of public and private delivery systems These commitments can be achieved through thought, spirit and infrastructure, using a methodical approach, all of which will focus on shaping the future of the country with the framework of "Malaysia Madani" as the central Use it to its full potential.

The framework will be underpinned by 6 core values ​​including sustainability, prosperity, innovation, respect, trust and caring Focus on addressing the cost of living In this 2023 Budget, the issue of rising cost of living will be addressed, while the social safety net will be further strengthened and the ecosystem of small, medium and micro enterprises will be enhanced.

The government will also study options to reduce market disruption and streamline business processes through the adoption of high technology and digitization The overall goal is to ensure that wealth distribution and regional development are on a fair and sustainable track.

As Malaysia gradually transitions into the post-epidemic era, coupled with the reopening of border gates, Malaysia has successfully attracted a large number of tourist arrivals, and trade and business activities have increased, which has successfully promoted Malaysia into a solid recovery, especially in the The service sector benefits the most Strengthening public financial supervision is based on the country's sound macroeconomic fundamentals.

It is expected that the economy will grow by about 4 5% in 2023.

5%, thanks to strong domestic demand and the effective implementation of the 12th Malaysia Plan The government will accelerate reform measures, which will aim to strengthen public financial supervision, ensure macroeconomic stability, and at the same time, advance the national development agenda.

Therefore, the government will prioritize strengthening the regulatory ecosystem at all levels to increase public trust in government institutions These initiatives will focus on transparency, integrity and efficiency, especially in government procurement, good governance, and the development of government-linked companies (GLCs) and parliamentary institutions.

This daunting task requires the government to strictly observe financial discipline, not only to balance revenue and expenditure commitments, but also to reduce the government's balance sheet The government has identified various measures to address issues related to public finances, including exploring new sources of sustainable revenue and reducing leakage.

In delivering these measures, the government will prioritize reviewing public spending while, in the longer term, ensuring debt sustainability and boosting public spending These measures will enhance the country's fiscal flexibility and help implement counter-cyclical measures and keep Malaysia's economy resilient.

Ensure the government's fiscal sustainability The government will unswervingly safeguard the needs of the people and the country's well-being While finding a balance point, it will also ensure that the fiscal situation is in a stable and sustainable state.

This is critical to maintaining a high status in the country's ratings and ensuring Malaysia's primacy as an investor and business friendly country as it helps to create and attract high value-added investments for high quality and inclusive sustainability increase 2023 is expected to be a challenging year.

The government will remain vigilant to economic headwinds, as well as any potential geopolitical conflicts, in order to formulate appropriate strategies and actions Let us all unite and work together to ensure the smooth implementation of the "Prosperous Malaysia".

Anwar Ibrahim February 24, 2023 The government will unswervingly safeguard the needs of the people and the well-being of the country While finding a balance, it will also ensure that the fiscal situation is in a stable and sustainable state.

This is critical to maintaining a high status in the country's ratings and ensuring Malaysia's primacy as an investor and business friendly country as it helps to create and attract high value-added investments for high quality and inclusive sustainability increase 2023 is expected to be a challenging year.

The government will remain vigilant to economic headwinds, as well as any potential geopolitical conflicts, in order to formulate appropriate strategies and actions Let us all unite and work together to ensure the smooth implementation of the "Prosperous Malaysia".

Anwar Ibrahim February 24, 2023 The government will unswervingly safeguard the needs of the people and the well-being of the country While finding a balance, it will also ensure that the fiscal situation is in a stable and sustainable state.

This is critical to maintaining a high status in the country's ratings and ensuring Malaysia's primacy as an investor and business friendly country as it helps to create and attract high value-added investments for high quality and inclusive sustainability increase 2023 is expected to be a challenging year.

The government will remain vigilant to economic headwinds, as well as any potential geopolitical conflicts, in order to formulate appropriate strategies and actions Let us all unite and work together to ensure the smooth implementation of the "Prosperous Malaysia".

Anwar Ibrahim February 24, 2023.