He said the robust consumer spending seen in the post-pandemic period has decreased due to inflation and the high cost of living. As a result, while growth is expected, he said it will be at a slower pace of 4% to 5%.

“Growth will occur, but at a slower rate. The cash stimulus has been spent, and the revenge spending we saw in the post-pandemic period has already faded,” Lee said today at a briefing on SERC’s Quarterly Economic Tracker report.

He stressed the importance of strategic policies that need to be implemented by the government to provide better clarity for the country’s economic participants.

The New Industrial Master Plan could play a vital role in stimulating innovation, encouraging technology adoption, addressing global concerns, and ensuring economic stability and inclusivity, he said.

By focusing on high-quality and value-added industries, Malaysia can accelerate its industrial growth and cope with the current economic challenges, he added.

Lee also said China’s major slowdown in economic growth could pose a problem for trading partners like Malaysia since it could reduce China’s demand for consumer goods and raw commodities.

“Concern should be expressed over China’s high youth unemployment rate, which reached nearly 21% in June. For the past year, there has also been pressure on the Chinese real estate market, which hasn’t been properly handled,” he added.

On the upcoming state elections, Lee said it will act as a test for the unity government.

“Hopefully, the outcome will not come as a surprise. The status quo will be preserved if the election results meet market expectations,” he added.