Malaysia on track for 2025 GDP growth despite tariff war risks, says Rafizi

The Star

Malaysia is on track to meet its 2025 gross domestic product (GDP) growth target despite challenges posed by the ongoing tariff war, says Economy Minister Datuk Seri Rafizi Ramli.  Speaking to reporters after launching the World Bank report titled "A Fresh Take on Reducing Inequality and Enhancing Mobility in Malaysia" on Wednesday (Feb 5), Rafizi assured that the government is closely monitoring the risks, with the Ministry of Investment, Trade, and Industry (MITI) responsible for gathering input from all ministries.  WATCH MORE: https://thestartv.com/c/news SUBSCRIBE: https://cutt.ly/TheStar LIKE: https://fb.com/TheStarOnline

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00:00How do you see that affecting Malaysia's economy and our economic outlook? Are you going to

00:09be revising the forecast? And how do you think it would affect the region as well?

00:16The government is going through the process. MITI has been tasked to evaluate and put our

00:28strategy forward and streamline all ministries' response to it. So I think I leave that to MITI

00:39in terms of what exactly is our official response. Some, if we need to respond, I suppose we have to

00:50wait and see. But clearly, internally, the government has a strategy that we will have

00:56to adhere to. And we'll take cue from MITI. As far as the economic growth outlook is concerned,

01:07there is no discussion now on revision. So I think, again, we'll take cue collectively.

01:15And usually economic outlook is only finalised and shared closer to the budget. So I think,

01:30whatever it is, I think we'll leave that to Bank Negara and Ministry of Finance and we'll work

01:38together. But normally, as a matter of practice, we'll share the government's growth outlook in

01:47time for the budget, unless something really drastic happens. I think we have to navigate

01:58the volatility. We've seen on Ringgit, for example, we've seen Ringgit actually strengthen

02:06in the last one week or so. And it's very much the function of the market. Because of the evolving

02:19and developing nature of the trade war that is happening now, the market will price what they

02:29expect will happen. And every speculation, every projection that they price into their position

02:41in the market will definitely affect Ringgit, either by strengthening dollar or not. So I think

02:51that is given that we will go through some, we have to navigate some changes and volatility,

03:00I hope it's not going to be extreme. But to me, the good thing is that, at least in the last one

03:10month, the optimism for the medium and long term growth prospect of Malaysia has not changed. And

03:21the what is happening in the market as a result of the trade war, I think it's something that

03:30the market will find a way to factor everything and price everything in due time. And eventually,

03:40it will come back to the value proposition that the Malaysian economy can propose to the world.

03:48On that note, I think some of the hypothesis that had resulted in a lot of interest in Malaysian

04:00economy for the last one year or so have not changed. The projection that the world is going

04:11to be more digital and AI is going to be mainstream, that has not changed. And with that, that means

04:17that demand for chips will go up. And that will bolster Malaysia's trade. The fact that we need

04:26to manage climate change, and we have to find a good equilibrium point for sustainable energy in

04:38the future, that has not changed. So a lot of our economic plans have been built around long term

04:49mega trends. And the mega trends have not changed. If anything, in fact, it may favour us. More and

05:00more corporations around the world and economies around the world will pay more attention to

05:06building more resilient global supply chain. And our long term plan is to make sure that Malaysia

05:16plays a pivotal role in that global supply chain. That has not changed either. So I'm not saying

05:23that it doesn't affect Malaysia, it affects everyone. But I think it's going to be a

05:32permanent feature in the global economy as you have more and more economies that are

05:40influential in the overall global supply chain, that we have to go through some adjustments and

05:48volatility. But it's just a matter of whether it's going to be short, whether it's going to

05:54be medium term, and eventually the market will price in everything provided that our fundamental

06:00growth narrative is strong. And at the moment, I think we are still very strong in terms of our

06:09future value proposition to the world.

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