KUALA LUMPUR (July 4): Khazanah Nasional Bhd expects sectors hit hard by the Covid-19 pandemic such as aviation and tourism to not see recovery until 2023, said its chairman Datuk Seri Ismail Sabri Yaakob.

However, Ismail Sabri noted he is “very confident” in the sovereign wealth fund’s ability to overcome the specific challenges impacting these sectors and create sustainable long-term growth.

“I am also encouraged by Khazanah’s positive overall performance in 2021 despite the significant commercial obstacles caused by the Movement Control Order (MCO) and a tepid global economy.

“I am confident Khazanah is now perfectly positioned to aggressively embark on the signature strategic initiative, Advancing Malaysia,” he said in Khazanah’s 2021 annual report.

Ismail Sabri, who is also prime minister, acknowledged that Covid-19 has eroded the nation’s financial position to a certain extent.

"The negative impact on government-linked companies (GLCs), corporate and manufacturing sectors which are all national revenue generators cannot be understated," he said.

He added that Malaysia "would still feel its after-effects" in the years to come.

“Nevertheless, this challenging situation that we are in can be seen as an opportunity for us all to find solutions together in order to further revitalise the national economy,” he said.

Citing Bank Negara Malaysia’s projection for economic growth of between 5.3% to 6.3% for 2022, Ismail Sabri said economic expectations have brightened, supported by rising global demand, re-opening of international borders, recovery in the labour market, and continuing government policies, given Malaysia as a trading nation.

Nevertheless, this is subject to the risk of new, transmissible Covid-19 variants, geopolitical tensions, volatility of financial markets, and global supply chains, he added.

“Since the onset of the pandemic, Malaysia had embraced a holistic approach to fighting Covid-19, with the government and communities working together to battle a severe crisis, the likes of which have never been seen before.

“The government employed a clear strategy focusing on three main thrusts: fine-tuning the healthcare delivery system to curb the spread of the virus; prioritising the treatment of infected citizens; and providing fiscal injections into the economy to help buffer it from global impacts as well as protect livelihoods through a variety of initiatives,” he said.

For the financial year ended Dec 31, 2021 (FY21), Khazanah's net profit fell 84.19% to RM444 million from RM2.81 billion, as revenue fell 36% to RM5.35 billion, from RM8.36 billion. In total, it paid RM2 billion dividends to the government for the year, unchanged from FY20.