Wahid said one important factor that has contributed to Malaysia’s resilience is its strong and stable financial system.

“Malaysian banks are well capitalised, liquid as well as better managed, and they are effectively regulated and supervised by Bank Negara Malaysia,” he said in his speech at the InvestMalaysia forum this morning.

Last month, finance minister Tengku Zafrul Aziz said Malaysia’s economic outlook could be hurt by pessimism in the global economy even as the government kept to its existing growth projections.

Bloomberg quoted him as saying Malaysia must be prepared for a slowdown in the global economy, despite the country’s strong economic expansion following the reopening of its borders and amid booming exports.

However, Wahid pointed out today that the country’s financial system was complemented by well-functioning debt and equity markets valued at RM3.5 trillion as of the end of 2021.

“Malaysia is also home to the world’s leading Islamic capital market, valued at RM2.3 trillion, which is almost two-third of (the value of) the total capital markets,” he said.

Nonetheless, challenges remain.

The former economic affairs minister noted that global supply chains had been under pressure with economies returning to normal post-pandemic, exacerbated by trade tensions between US and China as well as the Ukraine-Russia conflict.

He said these factors had caused commodity and logistic prices to surge, in turn causing high inflationary pressure which had forced central banks around the world to tighten their respective monetary policies.

This includes Malaysia, which raised its overnight policy rate by 25 basis points (bps) to 2.5% this month, the third consecutive increase this year. However, Wahid noted that China was the exception.

“This is likely to cause economic slowdown and potentially recession in some countries in 2023,” he said. However, he expects Malaysia to buck the trend.

“Resilience should be redefined as the outcome of a process of transformation or of reinvention, so that we can sustain and ‘bounce back’, but in a much-improved form than before,” he said.

“This process of ‘reinvention’, of finding our competitive position within that future, is not only an academic or data-driven exercise, but requires talent too,” he said, adding that the next generation of leaders must bring a fresh perspective to the corporate sector.