IMF EVALUATION REFLECTS MALAYSIA'S STRONG ECONOMIC FUNDAMENTALS - ECONOMISTS

By Anas Abu Hassan

KUALA LUMPUR, Dec 20 (Bernama) -- The International Monetary Fund’s (IMF) assessment on Malaysia's economy shows that the country's prudent macroeconomic and financial policies have played a critical role in anchoring growth, economists said.

Putra Business School economist Associate Professor Ahmed Razman Abdul Latiff said the country's economic performance continues to reflect strong underlying fundamentals, driven by sensible policy measures.

He said the IMF’s assessment underscored that the strong economic performance has helped maintain stability, which together provide a strong buffer against external shocks.

“Nevertheless, while near-term prospects remain positive, downside risks persist, particularly from external factors such as weaker global demand, especially from major trading partners, trade disruptions due to geopolitical events and financial market volatility,” he told Bernama.  

On Friday, the IMF released a statement noting that Malaysia has shown notable resilience against global trade tensions and policy uncertainty with its economy growing at a healthy pace this year, supported by strong domestic consumption and investment, solid employment growth and a global tech-sector upcycle.

It also highlighted that the October 2025 Malaysia-United States trade deal has helped to reduce uncertainty for businesses and consumers in Malaysia.

The fund noted that Malaysia’s economic resilience is expected to continue in the near term, supported by strong domestic demand.

Moving forward, Ahmed Razman opined that continued fiscal discipline targeting lower deficit budget, data-driven monetary policy, and structural reforms on wages and job mismatch will be critical to rebuilding economic buffers.

“It is crucial in ensuring sustainable and inclusive growth amid an uncertain global environment,” he added.

Meanwhile, Sunway University economist Dr Yeah Kim Leng believed the positive review by the IMF has affirmed Malaysia's resilience especially in its ability to buck slowdown trends and shielded itself from global headwinds.

This, he said, was translated favourably as the economy expanded above expectations, registering a 5.2 per cent gross domestic product (GDP) growth in the third quarter of 2025.

"The preemptive interest rate cut coupled with gradual approaches in fiscal consolidation and subsidy rationalisation have been prescient in navigating the turbulent global landscape while continuing to sustain consumer and investor confidence with targeted measures.

"IMF's favourable assessment is expected to further fortify confidence," he said.

-- BERNAMA