On March 29, Bank Negara Malaysia (BNM) released its annual report for 2022, providing the central bank’s obligatory summary of last year and its projections for the months ahead.

The report, however, is long and technical, and the average Malaysian may struggle to make heads or tails of it. From analysing the ups and downs of the economy to delving in fine detail into the financial sector, there is a lot to uncover.

To make things easier for the layperson, here are five key takeaways you should know.

1. Expect the economy to grow

How will the economy perform this year? BNM thinks it will grow at a range of 4-5%, lower than the 8.7% registered in 2022, which means the economy will still grow but at a slower rate.

Should Malaysians be concerned? No – 2022 was considered an exceptional year, following the government’s relaxation of the movement control order. Many of you would’ve spent money saved in 2020 and 2021, as businesses were allowed to operate again.

That 8.7% growth was way above the 5% historical average before the pandemic, so it makes sense it would return to normal this year.

If you own a business, you might have to tamper down your growth expectations in 2023. For example, if your profits grew by 20% last year, expect that it will still grow in 2023, but perhaps at about 10-15%.

2. Tourism industry to bounce back

After three years of the pandemic, 2023 is set to see Cuti-Cuti Malaysia return in full force. BNM expects tourism revenue to more than double to RM58 billion from RM27.9 billion last year.

This is important because tourism provides a lot of jobs for Malaysians, encompassing about 23.6% of total employment in 2019.

Of note is that Malaysia is set to receive many Chinese tourists, who are known to spend a lot. In 2019, these visitors spent a total of US$277 billion, or about 20% of total tourist spending in the world.

3. Prices, cost of living could be higher

Here’s the tricky part. Malaysia’s inflation – which measures how much prices have increased generally – was at 3.3% in 2022, and BNM thinks this year, it will be around 2.8-3.8%.

In other words, inflation could be lower or higher in 2023. If you’re struggling to make ends meet, do take note of this to plan your expenses for the year.

Should you worry if inflation rises above 3.8%? On the one hand, yes, as it has averaged only about 2.3% from 2004 to 2019.

Simultaneously no, as Malaysia experienced an inflation high of 4.7% last August.

4. Banks are resilient

You might have heard about the Silicon Valley Bank and Credit Suisse problems, and worry whether Malaysian banks would have these problems, too.

Malaysian banks are resilient, according to BNM. To put it simply, our local financial institutions have enough resources to absorb huge losses, so you shouldn’t worry about whether your money is safe.

In more technical terms, the liquidity coverage ratio of Malaysian banks has increased from 125% in 2015 to 154% in 2022. Anything above 100% is considered safe.

5. Job market expected to improve

For the job seekers out there, this could be good news: BNM projects the number of employed Malaysians will increase to 16.1 million from 15.8 million last year.

Furthermore, the central bank projects that salaries (non-executive positions) will grow by 5.4%.

Finally, tax cuts could prove to be a lifesaver, promising a much brighter 2023 for many.

This article was written by Su-Wei Ho for MyPF. To simplify and grow your personal finances, follow MyPF on Facebook and Instagram.