Malaysia's central bank on Wednesday maintained its economic growth forecast for 2023 at 4 per cent to 5 per cent, saying that improved domestic conditions will likely offset risks stemming from a global slowdown and persistent inflation.
In documents released on Wednesday, Bank Negara Malaysia BNM said Malaysia's economy is fairly balanced with a recovery in tourism, China's reopening, resilient labour markets and firm domestic demand.
Malaysia's banks are well-capitalised, according to BNM, and that recent volatility in the global banking sector hasn't had a significant impact on the country's financial markets.
BNM is vigilant about potential spillover risks from the global banking sector to domestic financial markets, it said.
In 2023, headline inflation and core inflation were projected to average between 2.8 per cent and 3.8 per cent, according to BNM.
It warned that the inflation outlook remained uncertain and tilted to the upside from higher commodity prices and changes in government subsidy policies, as well as price control measures.
The central bank left its key interest rate unchanged at its previous meetings this year, citing a need to assess the impact of four consecutive rate hikes in 2022 on the economy.
The monetary policy considerations of BNM will continue to focus on managing inflation risks while supporting sustainable growth.
There will be a decision on the degree of monetary accommodation based on the impact of changing developments on balance of risk to inflation and growth, given the lingering uncertainties.