Malaysian Prime Minister Anwar Ibrahim unveiled a plan on July 27 to reset the Southeast Asian economy’s growth trajectory, with an eye on boosting incomes and participation of women in the workforce while lowering the budget deficit to reduce stress on government finances.
The plan involves attracting companies that create high-income jobs for locals with tax breaks, boost manufacturing and implement reforms to make its stock markets attractive, Anwar said in his speech in Kuala Lumpur.
The key goals of the plan are to lift Malaysia to among the top 30 global economies in the next 10 years and improve its human development index ranking to the top 25, he said.
The state of the economy has been a major theme as six key states head to the polls on Aug 12. Elevated inflation, a weak ringgit, stagnant wages and slowing growth could weigh on Anwar’s chances as he faces his biggest public vote of confidence since coming to power after a divisive general election in November.
Anwar’s multi-racial unity government must win at least three of the six poll-bound states in the contest against the conservative Malay federal opposition alliance. Anything worse could prompt Anwar’s newfound allies to reassess their support, potentially jeopardising his efforts to slash subsidies and the fiscal deficit.
Anwar’s 10-year plan outlined a goal to reduce the fiscal gap to 3% of gross domestic product or lower in the coming decade, while aiming to boost economic growth to 6% in the short-term.
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Malaysia’s growth expanded at a more moderate pace in recent months, as slowing external demand weighed down on exports, according to the central bank. The government expects the economy to expand from 4%-5% in 2023, a far cry from last year when it took the mantle of the fastest growing economy in Asia.
“If we’re satisfied with the current situation, the economy will continue to record growth of between 4% to 5%,” Anwar said. “However, if we work hard and implement reforms, we can achieve 5.5%, in fact I believe it is not impossible for us to achieve 6% growth in the near term.”
Some key points from the economic plan:
- Adults earning below 100,000 ringgit to get 100 ringgit e-cash credits
- To boost digitalisation grant by 100 million ringgit
- Set aside 100 million ringgit for infrastructure
