The Malaysian economy is recovering strongly from the COVID-19 disruptions in 2021 and early 2022.
Protected by its high vaccination rate, continuing nationwide inoculation program, and adequate healthcare capacity, Malaysia has progressively reopened its economy despite the resurgence of infections by the Omicron variant in early 2022. Economic growth should firm up further with the country’s transition to the endemic phase of COVID-19 from the beginning of April. In this respect, accommodative policy settings can be recalibrated to build more buffers against future shocks and safeguard financial stability.
Additionally, the economy is on track to expand by 6.0 percent in 2022 after growth firmed up in Q1 on the back of a strong rebound in private consumption and buoyant exports. Headline inflation is set to increase moderately to 3.0 percent in 2022 from 2.5 percent in 2021, reflecting the partial pass-through of higher global food and energy prices to consumer prices.
These conclusions are highlighted in the 2022 Annual Consultation Report on Malaysia.