Its country director for Singapore, Malaysia, Brunei and Thailand Ndiamé Diop said Malaysia would likely see growth rate retreat to 4% this year from 2022.

The fourth quarter and full year growth rate for 2022 will be announced by Bank Negara Malaysia tomorrow, but the market is already expecting growth rate of up to 8.5% for the year.

Diop, who was speaking at the unveiling of the World Bank Malaysia Economic Monitor Report today, said economic growth in Malaysia could potentially reach 6% in the good times.

However, he said, certain steps would have to be taken to make the higher growth rate a reality.

“Raising revenue is imperative. This improves revenue-to-GDP ratio and (reduces) debt-to-GDP ratio. It gives the government more to spend (responsibly) and more in store for shock-proofing,” he said.

Diop said investment-led reforms are also critical.

“An investment aspiration framework is a good start but it is important to first attract businesses that want to invest in Malaysia,” he said.

Diop said to achieve this it is crucial to improve workforce productivity.

“Politicians must advocate investment in childcare that will lead to greater women participation in the labour force. This is also a great political move,” he said.

Diop said an acceleration of digitalisation that is also inclusive could help to push growth in productivity and reverse the slowdown in labour yield seen over the last decade.

“We are just one shock away from a recession. (Even) if there is no shock, we should expect global growth to slow down significantly,” he added.