This article first appeared in The Edge Malaysia Weekly on March 25, 2019 - March 31, 2019

THE Malaysian economy, mired in weakening growth and transitional issues amid a global slowdown, is in need of pro-growth policies to give it a leg-up.

Concerns over the country’s performance, however, may be overdone as it has the ability to bounce back, as seen in the past. Tan Sri Dr Zeti Akhtar Aziz says Malaysia’s fundamentals are still solid and its underlying growth remains stable.

“I have always said that a steady growth path [for the country] is between 4% and 6%. We are still in that range, so I’m not too concerned … what we need now is to implement pro-growth policies to get the economy on a stronger growth track,” she says.

“If we slip into much slower growth, then yes, I would be concerned because it is always harder to drive growth when it has slowed significantly. But Malaysia is not in that situation. We are still having growth and 4.7% is good growth, considering the circumstances.”

The government recently set up the Economic Action Council to help stimulate growth and to address the economic problems besetting the people. A widely held view is that economic reforms are not happening fast enough.

On this, Zeti, who is a member of the EAC, says Malaysia has the elements and resources to move things along faster. “We have the potential … it has to be focused on undertaking measures [to address the issues] and some of them have been undertaken. More can be done. I am optimistic it can deliver the kind of results we want.”

A dampener on global growth is expected to come from a slowdown in China but Zeti is optimistic that the country can manage its growth to avoid a sharper-than-expected downward trend.

“While others say there will be an accelerated slowdown, I am confident that China has the resources and policy space to avoid this despite facing problems like trade tensions with the US. If it (the situation) is prolonged, I think China will be able to sustain the current range of growth that it is experiencing. It is aware, for example, of the non-bank issues but its banking system is actually very well regulated and is performing. I still have confidence in China’s capability to manage its economic situation.”  

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